Enable and Prudential are set to launch an innovative mortgage protection plan designed to compete directly with ASU, in summer 2004.
Available to advisers exclusively through enable Mortgage & Insurance Network and their partners, the product offers extended sickness cover, with guaranteed premiums, for the full term of the mortgage subject to a maximum age of 65 years.
Under traditional ASU contracts, sickness cover ceases to be paid out after 12 months. It also provides three months free cover from outset with an option to include 12 months unemployment cover and is priced to compete directly with ASU.
Michael Ward, managing director of Enable, says: “The benefits provided by ASU and the terms and conditions of the market's existing leading products simply will not meet the need of customers, or the adviser post regulation.
“It's not acceptable that policyholders and their advisers continue to depend on products where the sickness benefit can be paid for one year, which potentially equates to only one twenty fifth of the need, on a 25-year mortgage.”
Mark Wood, chief executive of Prudential UK, adds: “The two companies share a belief with the management of enable that the time is right for a fresh approach to mortgage payment protection.
“An innovative, key distributor to help us develop the product was sought. The aim is that this new mortgage protection plan from the Pru will make significant inroads into the market, benefiting advisers and their customers by providing real long-term sickness cover.”