BritishInsurance.com in conjunction with Assurant Solutions has launched a new direct to consumer age banded Mortgage Payment Protection Insurance product which it claims provides the cheapest 12-month cover in the market.
Available from www.bestinsurance.co.uk, the latest website to be launched by BritishInsurance.com, MPPI can be purchased at just 25% of the cost of 10 lenders.
By reducing commission rates to just 20%, www.bestinsurance.co.uk can offer hugely reduced premiums for a choice of accident, sickness and/or unemployment benefit.
Assurant Solutions, a specialist in creating insurance products that protect income, health, home and possessions, has designed and underwritten the product and will be handling the claims and administration.
Consumers aged between 18 and 25, opting for unemployment or sickness cover only, will pay 95p per 100 of monthly benefit.
A 25 year-old, opting for both unemployment and sickness cover will pay 1.60 per 100 of monthly benefit as compared to 7.95 a month for the same cover at Alliance & Leicester, and 7.89 a month at Nationwide.
The average cost amongst the leading mortgage lenders is 6.34 a month.
With www.bestinsurance.co.uk, a consumer spending 600 a month on mortgage repayments could save 8,532 in MPPI premiums over a 25-year term.
Ian Moffatt, sales and marketing director at Assurant Solutions, says: Our specialist team of actuaries and underwriters have successfully developed a product based on sound underwriting criteria and policy flexibility which puts the customers needs at the heart of the underwriting process.
While we have no influence over the premiums that our distributors charge their customers, we are pleased to see the industry embracing the need to treat customers fairly, offering them products which are both flexible and value for money.
Simon Burgess, managing director of BritishInsurance.com, says: Many young people are already struggling to meet their mortgage repayments and will not appreciate the burden of over-inflated premiums.
A 25 year-old buying a policy with the most expensive lender will end up paying 11,430 more than necessary – even the cheapest lenders policy results in a 5,940 over-spend.
This is because of the over inflated commissions, often in excess of 80%, that are taken by most mortgage lenders.
“In comparison we take a comparatively modest 20%, allowing 70% of the premium to go into the fund to pay claims.