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But surely most decreasing term MPLA policies decrease the capital sum covered at a particular rate so accelerated repayment/clearance of the mortgage capital before the term is up may simply mean that the MPLA cover amount exceeds the mortgage capital amount? See here for example:However, if the mortgage is paid off, then there is no life cover (on a standard decreasing term assurance). Although, of course, my statement depends on the terms and conditions of the policy!
Had the policyholder died after the loan was repaid, the proceeds of the policy would have formed part of his/her estate
Not necessarily - see the thread that I linked earlier that suggests that some or all decreasing term policies decrease the sum covered using some assumed interest rate which may not match actual rates and will not reflect any accelerated capital repayments on the mortgage sum hence there could be an excess even after the mortgage is cleared.If it was a basic mortgage protection (OP will need to check the T&Cs), regardless of a surplus sum assured, the payout will only be the outstanding mortgage amount.
What policy?that policy is a prudent pricing policy as required by the regulator.
Again I don't really understand what you mean.It wholly differs to the situation of once-off voluntary capital repayments.
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