When it comes to protecting your financial future, insurance plays a vital role. Specifically, mortgage repayment protection and guaranteed term assurance are two popular options for safeguarding your home and loved ones. In this blog post, we will compare these two insurance products, highlighting their features, benefits, and considerations. Additionally, we will focus on the inclusion of serious illness cover and ancillary benefits to help you make an informed decision.
1 Mortgage Repayment Protection:
Often known as Mortgage Payment Protection Insurance/Accident Sickness and Unemployment Cover (MPPI or ASU), is designed to cover your mortgage payments in the event of unexpected circumstances. Features of Mortgage repayment Protection:
a) In the event of unemployment, disability, or critical illness, MPPI ensures that your mortgage payments are covered for a specified period, typically up to 12-24 months.
b) Flexibility: MPPI offers different policy options, allowing you to tailor the coverage to your needs. You can choose the waiting period before the coverage kicks in and the level of benefit you receive.
c) Simplicity: The application process for MPPI is generally straightforward, with minimal underwriting requirements. This makes it more accessible for individuals with pre-existing medical conditions.
However, it's important to note that MPPI only covers mortgage payments, and the coverage duration is limited. Moreover, it does not provide a lump sum pay out for serious illnesses or additional ancillary benefits.
2. Guaranteed Term Assurance with Serious Illness Cover:
This type of policy offers financial protection for a specific term, and pays a lump sum in the event of the policy-holder(s) suffering a Critical Illness or upon death. When combined with serious illness cover, GTA offers a comprehensive solution with some features outlined as follows:
a) Death Benefit: In the event of your passing during the policy term, GTA pays out a lump sum to your beneficiaries, helping to relieve financial burdens in the future.
b) Serious Illness Cover: GTA can include serious illness coverage, providing a lump sum pay out upon diagnosis of a specified critical illness. This pay out can help cover medical expenses, lifestyle changes, or mortgage repayments during your recovery or indeed clear your mortgage in full.
c) Ancillary Benefits: GTA policies may offer additional benefits such as terminal illness cover, waiver of premium, or optional add-ons like income protection or Hospital Cover. These extras can enhance the overall protection provided.
While GTA with serious illness cover offers broader coverage, it may involve more stringent underwriting processes and higher premiums compared to MPPI.
Conclusion:
Choosing the right insurance product to protect your mortgage and loved ones depends on your specific needs and circumstances. Mortgage Repayment Protection (MPPI) offers simplicity and coverage for mortgage payments, albeit for a limited duration. On the other hand, Guaranteed Term Assurance (GTA) with serious illness cover provides a more comprehensive solution, encompassing death benefits, critical illness coverage, and ancillary benefits.
Consider evaluating factors such as your budget, desired coverage, and long-term financial goals when making a decision. It is also advisable to consult with a qualified financial broker who can guide you through the available options and help you select the best insurance product that aligns with your needs.
Remember, insurance is an essential component of a robust financial plan, ensuring peace of mind for you and your family in the face of unexpected circumstances.