Single-premium mortgage payment protection insurance never best advice, says survey
MORTGAGE INTRODUCER - 18TH OCTOBER 2003
A review of the mortgage payment protection insurance market by insurance providers. Select & Protect concluded there was no situation when the selling of single premium mortgage payment protection insurance could be considered best advice.
The survey concluded that many of the areas examined, which included value for money, method of payment, flexibility, early cancellation, the outcomes of claims and the average life of a mortgage, offered little or no benefit to the consumer.
“I would like to think that single premium mortgage payment protection insurance is dead and buried, said Simon Hood, chief executive of Select & Protect. He added, that the negative press surrounding single-premium mortgage payment protection insurance was making it harder to sell other protection business, ultimately leaving the consumer exposed.
Managing Director, Simon Burgess of Burgesses agreed with the conclusions of the review. He said: “The selling of single premium mortgage payment protection insurance is wholly inexcusable. Those who do so are charlatans.”
Graham Bolton, responsible for membership development at the General Insurance Standards Council disagree, saying the one-off payment policies offered high commissions to brokers partly because insurers had less administration on single payments. One off payments could potentially also protect consumers from yearly increases to their premiums, said Bolton.
The Association of British Insurers has already moved to establish a review of the baseline specification for these products, which could progress to guideline stage before June 2003.
