From Andrew Botte
I am writing in response to Thomas Reeh’s letter (Mortgage Strategy January 15). Is anyone else fed up with all the waffle surrounding single premium accident, sickness, unemployment policies?
All Reeh’s points are cogent and to the point. Single premium ASU in my experience (having worked for two sizeable brokerages and an insurer which sold single premium ASU) represents the most suitable solution for many customers, in particular those those who habitually cancel policies.
I speak as an appointed representative who is unable to sell single premium ASU due to the stance of my principal on the subject.
This is in no way intended as a criticism of my principal, Cotswold Mortgage Services. I am over the moon with its service and policies in general.
My view of single premium ASU is simple – where it is offered alongside a monthly pay policy, comparisons can be made and the charge rates (cost per hundred of cover) are the same so what’s the problem?
A comprehensive insurance factfind will highlight any historic cancellations of policies and the Initial Disclosure Document will cover the terms of the sale.
If customers are made aware that they will be paying interest on the product over the term of the mortgage or loan and they choose to purchase it, that’s great. They have been given a choice and have made an informed decision.
It’s up to product providers to en-sure commissions are kept to a sensible level, that charge rates for monthly and single premium products are comparable and that cancellation rights are clearly shown on documents issued by the insurer at the outset of the policy. This acts as a safeguard against un-scrupulous brokers who may not give full disclosure.
Rather than focussing on what can be a valid product in the right circumstances, why not focus on the suitability of sale and standardisation of commission or charge rates and then the need for review to ensure adequate cover is in place through the term of the mortgage or loan?
Let’s stop patronising customers and give them the right to make informed decisions.
Chase Evans HomeLoans