In common with most insurance polices, mortgage insurance does not provide cover for the following,
- Anything the customer is aware of when he took the policy out,
- Anything illegal or resulting form illegal activities,
- Anything over which the customer has a degree of control,
- Due to war, national conflict or similar risks.
The following outline the main exclusions for each of the main covers.
Life
Normal exclusions would include events caused by the customers wilful actions, drug or alcohol abuse.
Accident and sickness
Mortgage protection polices normally exclude,
- Medical conditions the customer was aware of when the policy started.
- Conditions associated with normal pregnancy,
- Conditions caused by the customers wilful actions, drug and alcohol abuse.
- Self-inflicted injuries, cosmetic surgery and other treatment which is not medically necessary.
The following are sometimes excluded.
- Chronic illness. This excludes resultant symptoms from a condition that was in existence when the policy was taken out whether it was requiring medical attention at the time of not.
- Back complaints. This may exclude all back complaints or only those for which there is no scientific evidence.
- Mental or nervous disorders. This may exclude all such disorders or only those not diagnosed by a relevant specialist.
A chronic condition has at least one of the following characteristics.
- It continues indefinitely.
- It is constant and is controlled rather than cured.
- The symptoms recur and have required treatment or consultation in the past.
- It requires long term monitoring or treatment, consultations and check ups, examinations or tests.
With regard to medical conditions the mortgage insurance customer was already aware of prior to taking out the policy, the Association of British Insurers led an initiative which resulted in an agreement in 2003 where those insurers signing the agreement, agreed that the following claims would be accepted,
- If the customer had been symptom free and has not consulted a doctor or received treatment for the condition in 24 months prior to the claim.
Unemployment
Mortgage protection polices normally exclude the following,
- The customer knowing they were going to loose their job when they took the policy out, irrespective of whether official notice had been given.
- Unemployment occurring at the beginning of the policy period, usually 60 or 90 days. This may be called the initial exclusion period.
- The customer resigns or takes voluntary redundancy.
- The customer can not work because he has been detailed in prison at Her Majesties pleasure. This exclusion would not apply if the customer was later acquitted.
- After temporary work unless in the middle of a claim.
- Customer dismissed due to misconduct.
- Unemployment due to customer’s wilful actions or drug or alcohol abuse.
- Unemployment which is normal, regular or seasonal.
- Unemployment at the end of a short term contract.