Choosing additional riders for your mortgage life cover

Riders that can be added at an extra cost:

• Waiver of Premium or Premium Protection Rider. This pays for the monthly premium payments if the Person Insured becomes disabled due to an accident or illness.

• Critical illness option: This pays out the mortgage if the Person Insured is diagnosed with a covered critical illness. These illnesses usually include Parkinson’s Disease, Major Organ Transplant, blindness, deafness, coma, some kinds of cancer, benign brain tumour, heart attack, major organ failure, loss of hands and feet, loss of speech and more.

• Mortgage payment protection. This covers some of the monthly mortgage payments if the person insured is unable to earn an income due to illness or accidental injury. The number of months for the payment protection is chosen at the time the policy is issued. Know more about getting payment protection with your mortgage life policy.

Extra benefits that are added to mortgage life insurance policies*:

• Accidental Death Benefit. This provides accidental death cover for up to the time the policy is issued (or denied issuance) or up to a certain number of days, whichever comes earlier. This means that if the Person Insured dies because of an accident, the cover will pay for the amount that is stated in the policy application.

• Terminal illness. The policy will also pay out to cover the outstanding mortgage balance if the Person Insured is diagnosed with a terminal illness such that the person is not expected to live longer than a specified number of months.

• Free life cover. This ensures that the Person applying for insurance has cover while he is waiting for his mortgage to be finalized. The cover is up to a certain number of days starting from the exchange of contracts to the time the house purchase is completed. The amount of cover will be the same as the cover amount or a specified maximum limit, whichever is lower.

• Separation option. If the mortgage life cover is bought on a joint life basis, upon the couple’s separation, they can a new mortgage life cover without the need to present further medical evidence. This option should be exercised within the three months after a new mortgage is taken out or the existing mortgage is rearranged.

• Guaranteed cover for increases. If the Person Insured moves to a new house or undergoes a major home renovation for the existing house, they can opt to get a new plan for the increase in the mortgage loan. Limitations apply. Some of these limitations include the maximum coverage amount, the age of the person insured (or the oldest person insured on a joint life plan) and exclusions to any other riders.

• Repayment guarantee. The cover guarantees the full repayment of the outstanding loan amount as long as certain conditions are met. Some of these conditions include:

  • the yearly loan interest rate for the mortgage does not exceed a certain maximum limit
  • the difference between the actual outstanding loan and the guaranteed cover is because the rate used to compute the coverage for the plan is lower than the interest applied on the loan.
  • The amount of the mortgage life cover is equal to the loan amount at the time the policy was issued
  • The plan is at least as long as the mortgage term.

*This may vary, depending on the provider.

Latest update: 17.06.2013

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Other sites: critical illness cover, lifeassurance.org.