Group Mortgage Protection Cover

The housing loan lender is obliged under the Consumer Credit Act 1995, section 126(1) to arrange at least one group or block policy with a life company to cover those borrowers who do not have their own protection cover.

The lender is the legal owner of the policy however the cost of each borrowers cover is passed on to them by means of increasing their loan repayments accordingly. While the lender is obliged to attempt to cover all its housing loan borrowers there are  some exceptions allowed under section 126(2) of the Consumer Credit Act 1995. a: when the house under loan is not intended to be the principle residence of the borrower or their dependants. b: borrowers who are not acceptable to the insurer or would only be acceptable at significantly higher premium rate than normal (i.e. high risk individuals or are in bad health). c: borrowers who are over 50 years of age at time of loan approval. d: borrowers who at the time the loan is made have sufficient life assurance cover that can be assigned to …

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