Insurance network CETA has launched a new ASU policy, CETA Safeguard, to increase take-up of ASU cover.
Although the government has set a target of having 55% of borrowers purchase an income protection policy by 2004, only a third of borrowers currently have one. Many consumers appear to have been put off by the cost of ASU policies and the 30-90 day exclusion periods which are imposed if a claim is made. Overall, ASU products are not perceived as offering good value for money.
CETA claims CETA Safeguard is cheaper than competitors, has no exclusion period and that policyholders will be given access to a range of additional support services to help them get back into employment as quickly as possible in the event that they make a claim.
Underwritten by the National Insurance and Guarantee Corporation, the cost per £100 of cover for CETA's new accident, sickness, unemployment and hospitalisation product is £4.95 (including insurance premium tax.
CETA Safeguard cover is provided from day one and as a result policyholders are not penalised by the imposition of unfair exclusion periods. Most other general insurance products provide cover from day one but many say there is no reason why ASU policies should not do the same.
Policyholders can purchase protection to cover up to 60% of their financial out-goings each month through CETA, subject to a maximum monthly payment of £2,500 to enable policyholders to cover monthly mortgage repayments as well as other essential payments for utility bills, council tax, hire purchase agreements and insurance renewals.
David Quick, managing director of CETA, says: “There are serious problems with many of the ASU products currently on offer. Whichever way you look at them, most simply do not offer good value for money. ASU policies have become the Cinderella products of the general insurance industry. The time has come for a new breed of ASU products to be developed and marketed.”