Burgesses Mortgagesafetynet
HEALTH INSURANCE - 1ST AUGUST 2004
The Company:
Burgesses is a specialist payment protection provider, based in Braintree, Essex. This policy is underwritten by Hamilton Insurance Company Ltd and administered by Paymentshield Ltd.
The Product
Mortgagesafetynet is the latest mortgage payment protection insurance from Simon Burgess of Burgesses organization. Key features of the plan are:
Back to day one cover ( a claim can be made after being off work for 30 days, with payment then going back to the first day of the disability/unemployment.
The initial waiting period is just 30 days.
The first three months cover are provided free to both new and existing mortgagors.
The plan is available to existing as well as new mortgage holders and also to re-mortgagers. The same rates and terms apply to each group.
Community rated (same rates regardless of age or gender)
Fully compliant with the ABI/CML baseline standard (a minimum product standard for mortgage payment protection insurance plans laid down by the two trade organizations).
Available to self-employed (and contract workers) as well as employed clients. Applicants must work a minimum of 16 hours a week and to have been in employment for at least the last six months.
Age range at outset 18 -64
Applicants must be permanently resident in the UK, Channel Islands or Isle of Man and must be eligible to receive Jobseekers Allowance.
Choice of disability only, unemployment only or both combined.
Benefit payable for up to 12 months.
Portability can be carried over to a new loan and/or property.
Maximum benefit is mortgage costs plus 25%, subject to an overall maximum of £1,500 a month.
Clients can apply online and even set up a direct debit mandate online.
Exclusion are fairly standard.
Competitiveness and price:
Monthly premium rates (inclusive of IPT) per £100 a month of insured benefit are:
Disability only £2.45
Unemployment only £2.45
Unemployment and disability £3.95
The plan recently came out as offering the lowest premium rate in a recent Which? Survey on back to day one plans, while a survey by Burgesses showed that the average mortgage payment protection insurance rate for the top 10 mortgage lenders was £5.78, compared to £3.95 for this plan (although product details may vary between providers)
Literature:
The website includes key features and the full policy wording plus a range of other information about payment protection. Client can also apply for a quote online.
Commission:
Initial and renewal commission is 20%
What they say:
Managing director Simon Burgess said: Mortgage borrowers should not feel obliged to take out their lenders mortgage payment protection insurance cover. By spending just a little time shopping around for the best deal from a reputable provider borrowers can make significant savings.
What we say:
Around a million mortgage payment protection insurance policies are sold each year most of them by High Street lenders with high premium rates. One opportunity for intermediaries is to re-broke such business and to sue the savings to help fund another protection insurance, so ending up with more cover for the same monthly cost.
This plan offers attractive rates and back to day one cover but it does pay only for a maximum of 12 months.
Pros and cons:
Pros
Low rates undercut major lenders
Three months free cover initially and back to day one cover
Available to new and existing mortgagors on the same terms
Cons
Benefits paid for up to 12 months only
Long term income protection provides better cover (but not unemployment cover).
30 and 60 day deferred periods offer even lower cost.
