Both Select & Protect and Berkeley Alexander have launched age-banded MPPI product solutions in the last few weeks, with Berkeley Alexander stating that its MortgageLIFELINE MPPI policy will benefit young buyers by cutting MPPI cover costs by up to 40 per cent for a 30-year-old.
Starting from £1.17 per month, MortgageLIFELINE includes 12-month cover for accident, sickness and unemployment and a ‘back to work’ package with CV and job search options in addition to its three-month initial payment holiday.
Following Berkeley Alexander research indicating that 85 per cent of MPPI policyholders are under the age of 45, the introduction of an initial three-month payment holiday means that premiums will be significantly reduced for younger policyholders.
Berkeley Alexander director Geoff Hall commented: “Younger borrowers should be paying less for their MPPI policies. Our aim was to deliver better value for the younger end of the market by removing the cross-subsidy that exists across age-bands in flat-rated MPPI products.”
However, Phil Perry, director at ARK Financial Planning, argued that age-banding and payment holidays were already integral to the MPPI sector: “I would have thought that payment holidays would be common. The MPPI market is definitely geared towards the younger generation as the older you are the closer you are to mortgage completion.”
Perry went on to cast further doubts on the product ranges within the MPPI market: “There is not a lot of difference between the deals being offered, just in pricing.
If it is a cheaper option to use Berkeley Alexander then that is a good idea but if it is just introducing the age-banding to flag up the company then I don’t think it will have much of an impact.”
Berkeley Alexander also announced it is to process MortgageLIFELINE cases through online, paper or CD submission.
New and existing borrowers are eligible for MortgageLIFELINE with a 27.5 per cent commission payment at inception and renewal for the lifetime of the contract for electronic submissions.
