Skip to Content

Mortgage cover: Making sure your clients stay protected

Published: 12th January 2021

Prepare for the unexpected

The global covid-19 pandemic has meant swift and sweeping changes to the way we live our daily lives and highlighted the importance of being prepared for the unexpected. And it’s outcomes like this that helped shape the concept of insurance originally, to provide financial security and protection should the unexpected happen.

Nowadays, there’s insurance for almost anything you can think of. From the everyday - car, mobile phone, travel, to the extraordinary – body parts and alien abduction1. But for most clients, buying a home is likely the biggest financial decision they’ll ever make and often, it’s not possible without the huge financial commitment of a mortgage.

The pandemic has forced many people to consider what would happen if they were unable to keep up with their mortgage repayments, mainly because of the vast impact the pandemic has had on unemployment. Luckily, the Government’s furlough scheme has provided protection to many, as well as relief on the demand for mortgage holidays through the banks. But what happens in the event where individuals are unable to work, because of say – serious illness or worse. Would they have the means to keep up with their monthly mortgage payments?

Homeowners' financial resilience

Even prior to the pandemic statistics show a lack of financial resilience amongst homeowners in the UK. One in three people have less than £500 in savings, whilst seven out of 10 save less than £100 a month2. Whilst higher income households have seen savings increase, those employed on low-incomes or who’ve been furloughed have seen their savings negatively impacted since the start of the pandemic, placing an even greater emphasis on protection3.

If your client is a homeowner, or thinking about buying a new home, mortgage protection could be a useful addition to their financial planning and many lenders recommend it. But with recent research from Compare the Market finding that more than three million households with a mortgage had no protection in place4, it’s something few first time buyers or homeowners consider.

This is alarming when you consider that a 30-year old is two and a half times more likely to suffer a serious illness before they retire than they are to die5. So, evidently, death isn’t the only event that can jeopardise a family’s wellbeing.

Mortgage Serious Illness Cover

That’s one of the reasons we created Vitality Mortgage Serious Illness Cover. It’s designed to cover your client should they suffer a serious illness and help pay off some – or all – of their mortgage earlier. Everything we do is underpinned by our unique proposition of encouraging and rewarding healthy lifestyle choices, which aims to help improve long-term health.

It covers 153 conditions, which is more than any other insurer in the market. This includes 100% payouts for 81 conditions6, which gives your clients the extra security knowing that their mortgage will be covered following a claim. While not necessarily life-threatening, they can still impact lifestyle and finances, so the remaining 72 conditions are paid out on a severity basis, which means your clients could receive a partial payout at an earlier stage of their illness. Importantly, on our Mortgage Serious Illness Cover, severity-based payouts won’t affect the level of remaining cover, so it will be sufficient enough to provide for the mortgage.

Simpler, better and easier

We’ve recently enhanced our life proposition to make it simpler, better and easier for both you and your clients. In the first instance, we’ve simplified our personal protection plan into one simple plan, with one Optimiser – providing you with a simple product structure making it easier and quicker to recommend and put in place.

Secondly, we’ve given all plan holders access to a version of the Vitality Programme to incentivise them to lead healthier lives, which research shows7 reduces the risk of serious illness. It’s not just about protecting our members when things go wrong.

Finally, we’ve made it much easier for both members and advisers to manage their plans – including the ability to effectively service your client’s plans. Now more than ever, it’s important to have the right provisions and protections in place, so it’s a good time to review your clients cover to make sure it still meets their needs.


1. sunlife.co.uk/articles-guides/your-money/10-strangest-things-to-be-insured/
2. https://www.bsa.org.uk/media-centre/bsa-blog/october-2019/guest-blog-lack-of-financial-resilience-impacts-you/ 
3. https://www.bankofengland.co.uk/bank-overground/2020/how-has-covid-affected-household-savings/ 
4. https://www.mortgageintroducer.com/almost-three-million-mortgaged-households-unprotected-life-insurance/
5. Vitality Risk Tool, based on a male and females likelihood of suffering a serious illness before the age of 65
6. Defaqto verified Competitor Comparisons, October 2020
7. Prevention of Chronic Disease by Means of Diet and Lifestyle Changes, 2008

Where to next?

  • Why communication is vital for client retention

    Tom Conner, Director at Drewberry, looks at how you can ensure effective ongoing client communication to help with retention.

  • Life cover isn't just for adults - Child Serious Illness Cover

    Our children are our most precious asset - so why don't we protect them in the same way as everything else we treasure?

  •                Insights Hub                                  

    Our Insights Hub brings you our range of adviser content - from video series to articles & blogs.