We recently had an adviser ask us this question:
If you are on claim with a bank mortgage cover and your mortgage is repaid during your claim does the claim end before you get to the end of the claim term?
Here is what we found:
ASB – Mortgage and Income Protection, benefit continues after mortgage has been repaid until the end of the chosen payment term.
Westpac – payments will cease if the mortgage is repaid. If disabled after the maximum 30 months and the life assured meets the TPD definition, Westpac will repay the outstanding loan amount. The policy then ceases.
Other banks have either Income based products, or an Agreed Value with a chosen benefit amount (Living Expenses).