The factsheet has been designed to provide an overview of both mortgage payment protection insurance (MPPI) and permanent health insurance (PHI), also known as income protection.
Depending on a client’s circumstances and budget, both of these products can meet the need to replace income or assist with mortgage repayments in the event that the insured is unable to work. MPPI can also provide these benefits in the event of involuntary unemployment.
The factsheet gives an analysis of both MPPI and PHI providing information on: market analysis, concept, eligibility, premiums, underwriting, main exclusions and taxation.
Other insurances are also covered plus an overview of the three state benefits which are most relevant to a loss of income in the event of unemployment or sickness: statutory sick pay, incapacity benefit and job seekers allowance.
The briefing also outlines the stages an intermediary should follow when dealing with a client’s protection needs, namely the fact find, needs analysis, recommendation and the demand and needs statement.
Rob Griffiths, associate director at AMI, commented: “Mortgage intermediaries are in an ideal position to review their client’s protection needs with many clients wishing to protect their income in the event of unemployment and/or inability to work due to sickness. The factsheet provides AMI members with essential information on the products themselves, in what circumstances they are suitable and how they could be used in combination to provide cover which is tailored to the client’s situation and preferences.
“The PPI advice and sales process continues to be a high priority for Financial Services Authority (FSA). Intermediaries should ensure they are operating in compliance with the insurance conduct of business (ICOB) rules when advising and recommending protection products. They should also view the output of FSA’s thematic work into the sector. The Office of Fair Trading (OFT) has also placed the PPI market under intense scrutiny – just last week AMI issued its response to the OFT’s market study and proposal to refer the UK’s PPI market to the competition commission.
“In response to the challenges outlined by FSA with regard to PPI sales, AMI produced and submitted an action plan detailing what we as a trade body would do to deliver improved standards. This factsheet is one of AMI’s action plan commitments and should be viewed alongside other AMI factsheets such as our PPI checklist.”
AMI’s payment and income protection briefing factsheet is available to all members from the AMI website by using the following link: http://www.a-m-i.org.uk/closed/cug/default.asp
