The product, which was introduced in January 2003, was specifically designed to address many of the problems traditionally associated with ASU products. In particular, CETA’s policy of offering back to day one cover (many policies impose 30-90 day exclusion periods) and allowing policyholders to purchase cover which allows a maximum monthly payment of £2,500 (most policies limit this to £1500) is proving to be particularly attractive.
Commenting on the sales increase and market trends for ASU David Quick, CETA’s Managing Director said “While some insurers are leaving the market because they are finding it difficult to make money our experience is that there is significant demand out there for a well thought out, competitively priced product.
“Allowing applicants to cover up to £2,500 each month is proving to be very popular - there has been a marked increase in people taking out cover at these higher levels. This is good news for advisers as they can earn up to £300 commission on each policy sold, more than the procuration fees paid on many mortgages.”
The key features of CETA’s Safeguard product are:
- Competitively priced at £4.95 (inc Insurance Premium Tax) per £100 of cover
- Provides accident, sickness, unemployment and hospitalisation cover
- Provides cover from day one
- Maximum monthly payment cover up to £2500
- Cover can be provided for 12 or 24 months (the latter does incur slightly higher premiums)
- Annualised commission of 27.5% paid on each policy sold
Brokers looking to increase their sales of ASU policies are advised by CETA to discuss the need for ASU cover with clients at the outset before a mortgage has been selected, sales are much lower if it is addressed once the mortgage details have been finalised.
ASU products are more relevant today than ever before. Many people think that if they lose their job the State will immediately support them. This is not the case and advisers should be encouraging any responsible householder to take steps to ensure they will continue to have an income if the worst come to the worst and they are made redundant or are unable to work due to an accident or illness
Brokers and financial advisors interested in knowing more about CETA’s new policy should call 0845 4583073 or visit CETA’s website at www.ceta.co.uk for more details.
