To encourage mortgage borrowers to shop around for the best deal on mortgage payment protection insurance (MPPI) instead of accepting the policy offered by their mortgage lenders; British Insurance has launched a new ultra low cost Mortgage Payment Protection Insurance product.
It offers premiums for a 25 year old at 1.60 or 27.63% of the average price charged by the top 10 lenders and is 20.13% less than the most expensive. The new policy is even 32.65% of the cost of the cheapest lender Bradford and Bingley. According to Andrew Hagger of Moneyfacts.co.uk People need to be made aware that there are alternative providers of MPPI offering superior levels of cover but at a much reduced cost, which can result in thousands of pounds being saved over the term of a mortgage.
This new product according to leading Financial Adviser Sean Horton of Enhanced Wealth Ltd is great news for the consumer who by shopping around either directly or via a broker, can not only save a significant sum but purchase a policy that is designed to pay claims rather than to avoid them.
Advantages include:
Premiums from only 0.95 per 100 of monthly benefit Tax-free claims benefits are payable from day one instead of being subject to the usual 60 day excess period Fully portable between lenders enabling those with pre-existing medical conditions to change to a cheaper mortgage deal if they wish Unemployment only or disability only cover both or combined
Simon Burgess, Managing Director of British Insurance says, Our research shows (see notes for Editors) that consumers insuring an average monthly mortgage payment of 600 could save on average 7,547 over the lifetime of a 25 year mortgage or 10,980 when compared to the most expensive lenders, even the cheapest lenders policies results in consumers over-spending by 5,940.
This is because of the over inflated commissions (often in excess of 80%) that are taken by most mortgage lenders. In comparison we take a comparatively modest 20% allowing 80% to go into the fund to pay claims.
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