At the end of February this year, I had a call from a client who was very concerned about his financial position.In January 2019 he suffered a stroke which left him with restricted mobility on the right side of his body and also some memory loss.
He was very anxious because the income protection policy which had kicked in the previous year was due to expire. Having been unable to work since the stroke, he knew he was going to struggle to make his monthly mortgage payments, so he asked me to look at his situation and identify a way forward.
I initially thought I would be speaking to Santander to seek their support by asking them to switch the mortgage from a repayment basis to interest only. He had never missed a payment so I was hopeful they would be supportive.
We started by examining the client’s income and expenditure and it was as we cross referenced this to his bank statements, I identified a direct debit to Royal London. Client could not remember what this was for other than he had been paying it since he took out the mortgage. He had no supporting paperwork to provide further detail.
So, with no detail other than the direct debit reference number, I called Royal London’s main switchboard to see if they could help. After a couple of transfers, I spoke to a member of staff who recognised the style of reference number and advised me to call the critical illness team and gave me their number.
With client’s authorisation, I spoke to the claim team who confirmed that cover was in place on a decreasing term basis and after a short conversation a claim form was sent through. We completed the claim form providing the necessary supporting documentation and also a signed authority to allow Royal London to approach client’s doctor.
Despite the disruption being caused by Covid-19, some eight weeks later on 22 April 2020, Royal London accepted the claim. Client was delighted because the payment was backdated to the time of the critical illness, the premiums paid in the interim were refunded and credit interest was added to the sum for the period. He would have enough to repay his mortgage in full and have a small surplus to add to his savings.
The funds were received directly into client’s bank account the following day and with his authority I arranged for a settlement figure from Santander to coincide with the fixed rate which expires at the beginning of May. Client is very happy because expenditure has now dropped so the budget will be in annual surplus rather than shortfall going forward.
· When taking a major financial commitment like a mortgage, seek professional advice on the options to protect yourself, your family and loved ones.
· Check your direct debits to make sure what you are paying for.
· Keep a summary of your protection with your mortgage documentation so that you or someone acting on your behalf can easily find it.
· At Affinity, we are an independent mortgage broker and in addition to sourcing you a great mortgage we can also put your protection in place. Remember, if you are worried that you have no protection or insufficient protection, please get in touch. It’s never too late to act.
Chris Bland - Senior Finance Consultant