The short-term income protection product has been designed to cover a policyholder’s mortgage payments if they become ill or have an injury that prevents them from working.
It will be available alongside an active mortgage or remortgage application, requiring no health or lifestyle questions at application and no upfront medical or financial underwriting.
National Friendly said the product would resolve the biggest barriers to protection conversations, which it considered to be complexity, confidence and price.
Mortgage Protect provides a monthly benefit linked to a customer’s mortgage repayments and allows them to choose from a range of deferred and claim periods of up to 180 days or 12 months, respectively.
When the mortgage term has ended, the cover will continue on a 70% of earnings basis until the policy ends at age 68. Premiums are renewable every three years.
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The policy covers mortgage payments up to £2,500 per month, and there is an additional benefit of up to 20% of the mortgage payment to cover other financial needs and household costs, bringing the total monthly benefit to up to £3,000.
It has a guaranteed insurability option so customers can increase their cover in line with an active remortgage without further underwriting.
There is also a rehabilitation benefit of up to £1,000 to support a return to work during a claim, and the death benefit is £2,500.
The product offers optional add-ons, including Fracture Cover and Friendly GP+, which covers the policyholder and family members at the same address, and Friendly Dentist.
Graham Singleton, chief executive of National Friendly, said: “A mortgage is the biggest financial commitment most people will ever make, yet it’s often the least protected.
“Mortgage advice presents a natural opportunity to address the protection gap by making protection discussions simpler and more accessible for consumers. This is arguably more important than ever following the Financial Conduct Authority’s final Pure Protection Market Study, highlighting the need for industry action to help more consumers consider their protection needs and access suitable cover.”
He said Mortgage Protect has been designed to make the protection conversation easier.
Singleton added: “With no health or lifestyle questions at application and a benefit built around the customer’s mortgage payment, it gives advisers another practical way to help more clients put valuable cover in place.
“For customers, that means greater financial resilience when they may need it most. For advisers, it means a more complete mortgage service and another opportunity to help close the protection gap.”
Donna Ambler, head of protection at TMG Mortgage Network, said: “Mortgage Protect gives advisers a straightforward way to introduce valuable cover as part of the mortgage conversation. With no health or lifestyle questions at application and benefits linked to the client’s mortgage payment, it is simple to explain and easy for clients to understand.
“It provides a practical and accessible way to help close the protection gap for clients whose needs may otherwise go unmet. We’re excited to use it as part of the mortgage conversation, helping more clients leave with valuable protection in place while delivering a more complete service.
“It’s also great to see National Friendly listening to advisers and responding to the barriers we face when discussing protection with clients.”
