Who Receives the Payout if I add Serious Illness Cover to my Mortgage Protection?

This can be a significant issue, the bank is entitled to any payout if you have a serious illness on your mortgage protection plan.

It is important to note why! When you take out a new mortgage you give legal ownership of your mortgage protection plan to the bank, so in effect, the bank becomes the new plan owner and you the borrower are the life insured.  So any payout from the plan goes to the bank.

Remember, you do have the option to have your serious illness cover on a separate plan that will stay in your ownership and give you full control over what happens to any lump sum paid if you ever make a claim.

Read more:

1. 1. Will My Health Issues Affect my Chances of getting Mortgage Protection?
2. 2. Who Can be Covered?
3. 3. Do I Have to Take Mortgage Protection from the Bank?