The Mortgage Operation is exploiting the cafeteria style concept with a protection plan that has critical illness, accident, sickness and unemployment cover, and decreasing term assurance.
The plan is aimed at homeowners who are looking to protect their mortgage repayments. But unlike some plans, policyholders cannot select just one or two elements. The elements must be taken as an entire package.
The critical illness element covers 14 conditions with the maximum amount of cover set at £1m.The decreasing term assurance is available from £8 a month and the accident, sickness and unemployment element pays out on up to 8 per cent of the mortgage advance. Policyholders can choose from a deferred period of 60 or 90 days.
Liverpool Victoria has a similar product called mimi, which has the three elements of The Mortgage Operation's plan, plus an income protection element. The critical illness element on mimi covers 17 more illnesses than The Mortgage Operation's plan and has extra options such as waiver of premium.
Mimi allows policyholders to pick and mix the elements they need. This is an advantage compared to The Mortgage Operation's plan if homeowners have existing cover and are looking to add another element as a top-up. Choosing The Mortgage Operation's plan in that case would mean that policyholders would be paying for benefits that might overlap with their existing cover.