Universal Cover
Universal Cover is a new accident, sickness and unemployment policy for people with mortgages from Simon Lance Burgess’s organisation. A few years back, Mr Burgess was a high profile purveyor of ASU and PPI plans that significantly undercut lenders’ own plans and he also offered more obscure covers such as alien abduction insurance and once insured a chicken for £1m(!). In a now rather discredited PPI sector, his products were better than most.
This new plan is underwritten by Cigna Europe Insurance Company and is administered by Cigna Insurance Services (Europe).
The plan is a one month deferred back to day one policy with the following main features:
• Three months free cover.
• No initial exclusion period.
• Pays on being unable to work due to sickness, accident, unemployment or becoming a carer.
• Premium rate £4.00 per £100 monthly benefit.
Maximum benefit: the lower of 60% of monthly income or £2,000 a month.
• Benefit lasts for a maximum of 12 months.
• The plan is available to UK workers (minimum 16 hours a week) aged 18-64.
• Premium rates and policy terms can be reviewed by the insurer at any time, with 90 days’ notice.
• The plan can last to age 65 or on earlier retirement but the insurer reserves the right to cancel cover before then at 90 days’ notice (as do many similar policies).
• Many conditions that are normally regarded as chronic, or require a consultant’s verification are covered (e.g. backache, stress) and just require a GP’s sign off.
• A rolling moratorium applies. This looks back one year and requires the customer to be free of treatment for a continuous period of 12 months going forward. This is therefore more generous than the more conventional 5/2/2 year rolling moratorium.
• The plan includes back to work assistance.
• Although customers must have a mortgage (or mortgage offer) at outset the plan can continue even if they no longer have a mortgage.
• Contract workers are covered for unemployment insurance but the usual rules for the self-employed and business owners mean that this element is likely to be of less value to them.
Comment: ASU/PPI plans are regarded as ‘toxic’ by some but, where they meet a customer’s need, there is still a place for them. This plan has wider cover than many similar plans, with a more generous moratorium and just a GP’s sign-off being necessary in order to claim illness or disability benefit.
The main downsides are that the unemployment element has little value to business owners, benefit is only payable for up to 12 months and to age 65 and the insurer can change terms or discontinue cover at just 90 days’ notice. As we closed for press, the website was due to go live soon.
Plus points: ASU cover that can continue beyond a mortgage: More lenient underwriting and on some claims than most; Back to day one cover; Three months free upfront.
Not so plus points: Terms may be changed at 90 days’ notice; Maximum 12 months benefit; May not suit all borrowers, especially business owners; Some outstanding queries when we closed for press: Not available to renters.
Website: http://www.universalcover.com.
Rating (max 10): Innovation: 7. Overall: 6. Bronze.