9: Other Insurance Based Policies Pt. 2 Flashcards
(38 cards)
Can PMI cover you abroad?
Unlikely, unless you bought some form of “international PMI”
What is the Global
Health Insurance Card?
Provides for treatment which becomes necessary
during your stay in the EEA, where it isn’t reasonable to wait to return to the UK before receiving
treatment.
When is international
PMI usually recommended?
Where the customer spends much or all of their time living or working abroad.
What is the objective of MPPI?
Protect a client
against their inability to keep up mortgage payments due to accident, sickness or
unemployment.
If a homeowner on certain income-related benefits has MPPI, what additional help might they be able to claim?
Support for Mortgage Interest (SMI)
MPPI pays a monthly benefit if the insured is unable to work for one of three reasons, which are?
- sickness
- accident or disability
- involuntary unemployment
Benefits are usually payable for up to how long with MPPI, and capped to how much?
12, 18 or 24 months.
Limited often a percentage of salary, a fixed amount (e.g. £1,500) or in relation to overall mortgage costs.
Are MPPI benefits taxable?
No
If a mortgage is someone’s most important regular bill, what policy could protect against being unable to pay this?
MPPI
MPPI is available to those at what age?
18 years to age 64 years.
Pre-existing medical conditions are excluded for MPPI. True or false?
True.
What are the typical employment requirements to qualify for Mortgage Payment Protection Insurance (MPPI)?
Currently employed or self-employed for at least 16 hours a week and have been employed/self-employed continuously for at least the last six months.
The insured must not be aware of any forthcoming redundancies.
They must not be currently away from work for any reason.
What is the typical deferred period on an MPPI policy?
30 - 180 days
When can a self-employed person claim unemployment insurance under MPPI?
Only if their business goes into involuntary liquidation; simply ceasing trading won’t qualify for a payout.
What notice periods must insurers give to cancel, withdraw, or amend an MPPI policy?
Cancelled or withdrawn = minimum of 90 days’ notice.
Amended = at least 30 days’ notice.
How are MPPI premiums usually paid and are the rates guaranteed?
Usually paid monthly
Rates not guaranteed often, but when they are, usually for 2-5 years
What was single premium cover with MPPI and why is it no longer allowed?
Premium was simply
added to the sum borrowed.
Poor value for money where the loan
was repaid early and is now banned by the FCA.
When can providers sell MPPI in relation to the mortgage loan?
Providers must wait until the later of 7 days after the credit sale or after providing a personalised illustration before selling MPPI. They cannot sell it at the same time as the loan.
MPPI is available for mortgages where the main residence is outside of the UK, Channel Islands, and Isle of Mann.
True or false?
False
How old do you need to be to set up an MPPI policy?
Under 65
Is there tax relief on MPPI premiums or tax on the benefits paid?
No tax relief on premiums.
Benefits paid are tax-free.
How does Accident, Sickness, and Unemployment (ASU) insurance differ from MPPI?
ASU is not linked or restricted to a mortgage.
Many ASU policies are now called Short-Term Income Protection (STIP).
What type of benefit does ASU insurance pay out if the insured cannot work? i.e how often
Monthly or weekly
What is the maximum benefit payment period typically offered by ASU?
Max 2 years
