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Jemma Sharland, account manager of LV= talks to Mortgage Adviser about the benefits to intermediaries

Mortgage Adviser: What is Mortgage & Lifestyle Protection designed to do?

Jemma Sharland: Essentially, Mortgage & Lifestyle Protection provides comprehensive long term cover against accident, sickness and (optional) unemployment. Benefits can protect mortgage payments and clients can choose to cover living expenses as well.

We designed our plan as a superior alternative to traditional MPPI and ASU products. MLP will pay out until the policyholder is able to return to work or the end of their policy term, which can be 30 years or more. At LV=, our average claims period is just under 7 years. Yet ASU only pays out for 1 or 2 years at most. With MLP both employed and self-employed benefit from our own occupation definition - we believe this provides the clearest and best type of cover. It is simple.

If you cannot do your own job, MLP pays out. And premiums are guaranteed for the whole term of the plan, so there are no nasty surprises.

MA: Mortgage & Lifestyle Protection is a unique proposition in the market. What kind of support are you offering advisers to help them get to grips with it?

JS: I and my telephone and field based account manager colleagues are offering one-to-one support to mortgage adviser firms. We also have three interactive online (CPD qualifying) modules and a wealth of information and ideas on www.LVmlp.co.uk. Advisers can go to our website, do online training and then print off their CPD certificate. We also have a workout on the FT Adviser Gym, where advisers can test their knowledge on MPPI related issues and solutions.

MA: How can advisers obtain a quote and submit an application for Mortgage & Lifestyle Protection?

JS: We have a one-page quote and apply process online. We also have a link with mortgage sourcing tools like Trigold, which allows the adviser to pre-populate the application, reducing the amount of time it takes to do the full application process.

At LV=, we have a team of medically trained interviewers who will pick up the clients basic information from the online system and give them a call and run through all of the medical questions over the telephone. Tele-interviewing speeds up processing and removes the non-disclosure risk for the adviser completely. Advisers I have spoken to have found tele-interviewing and the online application process to have exceeded their expectations.

MA: What kind of commission can advisers expect from Mortgage & Lifestyle Protection?

JS: There are two ways an adviser can receive their commission with our Mortgage & Lifestyle Protection. The two commission options are indemnity and non-indemnity. The adviser can choose how their commission is paid when they set up their agency with LV=. If they want to change their commission option at any time, then they simply contact us.

For example, a male smoker, aged 35 who chooses ASU cover with £850 a month mortgage payment protection for 25 years and £300 a month index-linked living expenses protection for 30 years, with a 3 month waiting period would pay a monthly premium of £50. This would pay upfront commission of £814.84 and renewal commission of £1.23 a month after 49 months. The commission can help advisers supplement their income, particularly at a time when the housing market has slowed and there are lower volumes of mortgage completions.

MA: In terms of the features of Mortgage & Lifestyle Protection, do you have to have a mortgage in place to take out the plan?

JS: No. Unlike conventional mortgage payment protection insurance products you do not have to have a mortgage at all. While it does cover mortgage and living expenses, you can opt to cover solely on living expenses.

MA: Why is the own occupation definition of disability under Mortgage & Lifestyle Protection so good?

JS: The own occupation definition gives clarity to advisers and, most importantly, to their clients. It is the best definition you can get. If the client is unable to do their job, not any job they might be suited to, they can claim. MLP is targeted towards the under 45's in non-manual, low-risk occupations.

What stands out is that we can actually offer own occupation to self-employed clients. But advisers should note that for clients in higher risk occupations, cover will cost more. There are only a small number of occupations that we cannot cover, and as a general rule, these include those that are mainly driving based; require a license in order to be able to perform the occupation; are heavy or unskilled manual labour; involve working at heights; working underground or are in the oil or gas production industry.

MA: What has been the uptake of the product so far?

JS: The uptake has been good. There was a gap in the market. Mortgage & Lifestyle Protection is almost like your middle ground between accident, sickness and unemployment cover and income protection.

MA: What were the key points advisers need to consider when talking to their clients about Mortgage & Lifestyle Protection?

JS: The things advisers really need to know is that it is long-term cover.

*It can cover clients until the age of 70, which is quite unique.

*The claim period for the accident and sickness element of the product is the entire term of the policy.

*The unemployment cover is for a total of 36 months throughout the term of the plan.

*Conventional accident, sickness and unemployment cover is usually only paid for one to two years.

*It is guaranteed premium, so when they are advising their clients they can confirm the premiums are not going to increase.

*Obviously if you have index linked premiums they are guaranteed not to increase further than the retail price index.

*Mortgage & Lifestyle Protection is underwritten from the outset so the adviser and client can be confident that when a claim is made it is going to be met.

*The own occupation definition as well and the index-linked aspect on the living expenses side.