Company enters menu product fray with packaged mortgage protection plan
Norwich Union has launched a new flexible mortgage protection policy, as the popularity of repayment mortgages fuels demand for cover.
The plan aims to protect borrowers with repayment mortgages for the life of their loan and enables them to add critical illness, mortgage payment protection insurance (MPPI) and mortgage income protection (MIP) to a life assurance policy. Premium protection is also offered and borrowers have the ability to cover home moves and improvements with the option to take out a new plan at no extra cost. In the event that a couple split up, joint plans can be split into single plans on separation.
Commenting on the launch, Willie Mowatt, head of protection at Norwich Union, said: 'The product can be shaped to fit around people's changing lifestyles. While a higher proportion of people may have cover for their mortgage they may not have considered protecting themselves in the event of a critical illness and how they would maintain their existing standard of life.'
However, unlike some menu products, policyholders can only take out additional benefits if they have first taken out core life cover, making the contract potentially less attractive to young, single buyers.
But Andrew Hollis, mortgage marketing manager at Norwich Union, said the provider did not want to make the product too complicated. 'We wanted to keep the product simple and relevant for the life of the mortgage by allowing alterations. But we did not want too much flexibility as it will become too complicated for consumers to understand ' we looked at the borrower's core needs and decided this did not include standalone critical illness,' he said.
