Mortgage cover still not understood
- 15TH OCTOBER 2007
Mortgage cover is still not being made transparent enough and consumers still don’t know the facts about it at the time of being sold a policy. Along with this, payment protection insurance (PPI) products in general aren’t being differentiated against which means that since the investigation in the sector which began in 2005 when the Financial Services Authority investigated and it was found that cover has been mis-sold, there has been a drop in sales of not only in loan payment protection but also mortgage payment protection insurance (MPPI). With the decline in mortgage protection policies being sold, this is leaving the homeowner wide open to losing their home due to repossession.
While the Financial Services Authority has made some improvements, Simon Burgess of standalone provider British Insurance believes that they should do more to make the consumer aware of the difference between protection products. “Mortgage cover can be a lifeline, stopping your home from being repossessed, yet so many people are sold it incorrectly or don’t really understand what the cover provides”, he says.
British Insurance make sure that they provide comprehensive advice about mortgage cover and they give the consumer access to the key facts of a policy before they buy which ensures that they are able to make sure that the cover would be suitable for their circumstances. Providing it would be, then it would give a monthly tax free income once you have been out of work for 31 days if you buy from British Insurance - others providers can ask that you wait up to the 90th day of being out of work. The majority of policies would continue paying an income for up to 12 months and with some providers extending this to 24 months.
Some of the exclusions which can mean a policy would be useless include if you have suffered from a pre-existing medical condition at the time of taking out the policy, being retired, self-employed or if you only work part time. British Insurance makes sure you know about the exclusions within a mortgage cover, ensuring that the customer would be eligible to claim.
