View more on these topics

Brokers must help clients take cover

We have been fortunate to have seen a number of years with low unemployment and economic stability, but the recent base rate increases have caused concern that clients could be left un- protected in the event of sickness, accident or unemployment.

The recent concern expressed by the Financial Services Authority focussed mainly on banks and mutuals. This puts even more onus on brokers to ensure they provide a full advice service and don’t simply pass clients on lenders to advise them.

As house prices rise and with them the cost of mortgages, the easy thing to do is put off buying insurance to cover accident, sickness or unemployment.

The facts are that approximately 500 people in the UK become unemployed every day. The government estimates that 70% of mortgage borrowers will not qualify for income support due to savings or a working partner. A third of people aged between 25 and 34 have experienced unemployment for a period of more than a month. And every adult in Britain is five times more likely to suffer serious disability than die before the age of 60.

Since October 1995, new mortgage borrowers receive no state help for the first nine months of unemployment or disability. The qualifications for benefits have also become stricter.

So why haven’t brokers sold mortgage payment protection insurance? There has been poor press, a lack of comparison tools, concern over the compliance procedures involved, the ability to go for soft options and refer to lenders, lack of flexibility by policy providers and the fear of having to know numerous policy criteria.

But MPPI cover allows a person the confidence to commit to paying back a loan. First-time buyers often have the excuse of being single for not buying life protection but that doesn’t wash with MPPI. MPPI is essential to keep clients out of debt and arrears. Policies are now being tailor-made and competition is leading to better pricing as well as choice.

Many advisers are concerned about compliance when using multiple providers. But what if a comparative quotation engine provided quotes based on clients’ needs in seconds, had a panel of 11 providers, gave you compliant data to put on file and did all of this online, based on the best cost to the client and with no single premium option? Enter ASU-box.

Recommended

The Mortgage Mole

Digging the dirt in the mortgage world …

SHIP refutes ITV equity release mis-selling scandal claim

Safe Home Income Plans has refuted Martin Lewiss claim on Tonight with Trevor McDonald, that equity release will become the next major mis-selling scandal.Jon King, chief executive of SHIP, says: It made good TV but the programme was not as well-balanced as I would have liked. Customers should always look for the SHIP guarantee, even […]

Pearson leaves HBOS

Chris Pearson, sales and marketing director at BM Solutions, has resigned from his position at HBOS.A spokeswoman from BM Solutions says: Chris has been with HBOS for over nine years, so of course we wish him all the best in any future endeavours.HBOS could not comment on Pearsons reasons for leaving or where he may […]

Tory air tax plan could hit overseas market

David Cameron’s proposals to charge a higher rate of aviation tax to consumers who take more than one short-haul flight a year will have a damaging effect on the overseas property market, says Rightmove Overseas.

Infographic - thumbnail

Infographic — health cash plans 2014

Health Shield has strengthened its position in the cash plan market, according to the latest Laing & Buisson report, increasing its market share by income from £27m in 2012 to £29m in 2013. The Health Cover UK Market Report 2014 revealed that the non-profit-making Friendly Society was the only provider in the top four to have increased its market share by income over the past year. Health Shield was also the only cash plan provider in the top four to have increased its market share by income every year for the previous five years. This infographic presents the figures.

Newsletter

News and expert analysis straight to your inbox

Sign up