Lenders accused of profiteering on protection insurance

A survey of the UK&#39s ten largest mortgage lenders reveals that, while falling over themselves to offer keenly priced mortgage deals, the same cannot be said about insurance and MPPI products.

The survey, conducted by Essex-based protection broker Goodfellows, found that the average cost for key benefits including 60-day excess, 12 months benefit, no free cover, no portability, and no unemployment-only cover, was £5.80 per £100. Goodfellows own Mortgageprotection plus product, offers additional benefits for £5.50 per £100.

Simon Burgess, managing director of Goodfellows, says: “Lenders are clearly profiteering at the expense of their borrowers! We all obtain this cover from the same source, the only difference is that Goodfellows and other independent brokers retain less commission and so are able to purchase more benefits for their clients whilst maintaining comparability of cost.”

Mike Williams, chief executive of the British Insurance Brokers&#39 Association, shares this view, saying: “Brokers provide policies that are better in price and cover than lenders and are clearly putting a fundamental element of best advice back into the sale of MPPI.”