The move is in response to demand from advisers seeking to meet the longer term protection needs of their clients, particularly those taking out mortgages over extended terms.
Details of the changes planned by the end of the month are outlined below:
• Critical Illness Cover - term increases from a maximum of 25 years to a maximum of 40 years
• Life or Critical Illness Cover (reviewable rates) - term increases from a maximum of 25 years to a maximum of 40 years
• Life or Critical Illness Cover (guaranteed rates) - term increases from a maximum of 25 years to a maximum of 30 years.
Commenting, Andy Peters, Distribution Director, said:
“We’re extending the term of our cover to meet a growing demand from mortgage brokers. Property prices in the UK have continued to rise and in some areas of the country average house prices are up to 8 times greater than average salaries. The traditional 20 – 25 year term is simply no longer affordable for many people and mortgage lenders are increasingly offering longer term mortgages to help people get into the property market and own their own home. In fact, recent research carried out for us shows that over 40% of people who bought their first property in the last 12 months have taken out a mortgage for a term of more than 25 years and a third have used up all of their savings buying their property .
John Ahmed, marketing and communications director at advisers Home of Choice added: "The demand for longer term protection plans has certainly been increasing, as more and more people are taking on longer term mortgage debt. Traditionally it's been life cover that's been available over the longer term. But for many people, critical illness cover is just as important as life cover, if not more so for those who have no dependants, which is the case for many first time buyers. As sales of protection need to increase, it is correct that products become more flexible.”
