British Insurance Mortgage Payment Protection Insurance
British Insurance Mortgage Payment Protection Insurance
British Insurance’s latest MPPI plan is of conventional design, with a choice of unemployment only, sickness and accident only or accident, sickness and unemployment.
The plan offers a choice of 30, 60, 90 or 180 days waiting periods. The marketing materials we saw implied a back to day one 30 day waiting period was also available, although the quotes engine did not offer this option online.
Plans can be taken out from age 18 up to age 65. Customers must be in employment and living and working in the UK and their mortgage must not be in arrears.
Benefit is payable for up to 12 months only. Maximum benefit is £2,000 a month, and is designed to cover mortgage interest plus insurance and other mortgage-related costs. Someone age 30 would pay, for an insured benefit of £1,000 a month:
Waiting period AS U ASU
30 days £12.90 £27.30 £30.20
60 days £10.70 £22.70 £24.90
90 days £9.00 £19.10 £21.00
180 days £6.30 £13.40 £14.60
Key: AS: accident and sickness cover only; U: unemployment cover only; ASU: accident, sickness and unemployment cover.
The cost of cover varies by age, so full ASU cover with a 30 day waiting period would cost £30.20 a month at age 30, rising to £39.30 at age 40 and £52.70 at 50. Female and male rates are the same, and there is no non-smoker discount. Insurers can change terms at 60 days’ notice.
Plus points: Despite huge ongoing problems around PPI sales practices, people still have mortgages that need protecting and MPPI has been a popular choice in meeting that need; But the UK’s economic situation has seen many providers raising their rates, restricting cover to certain professions only or withdrawing from the market completely; British Insurance traditionally undercuts lenders’ MPPI rates, while offering policies with similar levels of cover, which is what this plan does too; It costs little more to add sickness and accident cover to (now more expensive ) unemployment cover.
Not so plus points: As always, read the smallprint to ensure that the customer would be able to make a valid claim, especially for unemployment cover; Long term income protection (where unemployment cover can be added, as it increasingly is) can provide a better solution; As with many other PPI type products, we remain concerned that an insurer could revise its terms and conditions and pricing (with few restrictions) for existing customers at just 60 days’ notice—not good when the liability to be covered could be for 25 years or more.
Website: 08450 175 178 or http://www.britishinsurance.com.
Rating (max 10): Innovation: 4. Overall: 5. Bronze.