Director Alexander Burgess says the firm’s Defaqto-rated five star income protection policy - Universal Cover - is perfect for auto-enrolment, giving lenders and borrowers’ peace of mind their loans will not fall into arrears.
He comments:
“This cover is unrivalled; there’s no excess or exclusion period, a discrimination-free premium and the acceptance of claims following the onset of a wide range of conditions, including stress and backache. The policy’s structured in such a way that 90% of premiums are used to pay claims, which means if redundancy, an accident or sickness occurs it will pay out.”
The cost to credit providers, suggests Burgess, is a fifth of what it would cost customers and there’s an option to add it onto the mortgage APR at 0.009%.
This he opines, is a far better alternative to the limited supply of solutions currently available and superior to credit waiver products which have restrictive payment exclusion periods and no unemployment cover.
Burgess is also in discussion with the Financial Conduct Authority, who like Andrew Love, is concerned that the newly-launched Mortgage Market Review guidelines do not require lenders to ask questions around how the borrower will ‘protect’ the loan and continue repayments if an income goes. Following additional pressure from the Government, the FCA advises the issue ‘will be dealt with appropriately’.
Alexander concludes:
“This is clearly the solution to the protection gap and British Money is currently in talks with some of our more forward-thinking lenders who realise this. They’re keen to demonstrate to the Government they take this issue seriously and financially protect their borrowers, which is what the MMR is all about.”
