Alexander Burgess, British Money director, said the firm’s Defaqto-rated 5-star income protection policy Universal Cover was perfect for auto-enrolment.
He said: “This cover is unrivalled; there’s no excess or exclusion period, a discrimination-free premium and the acceptance of claims following the onset of a wide range of conditions, including stress and backache.
“The policy’s structured in such a way that 90% of premiums are used to pay claims, which means if redundancy, an accident or sickness occurs it will pay out.”
Burgess suggested that the cost to credit providers is a fifth of what it would cost customers and there’s an option to add it onto the mortgage APR at 0.009%.
He added that they are superior to credit waiver products which have restrictive payment exclusion periods and no unemployment cover.
Burgess is also in discussion with the Financial Conduct Authority, who is also concerned that the MMR guidelines do not require lenders to ask questions around how the borrower will protect the loan and continue repayments if they lose their income.
Alexander added: “This is clearly the solution to the protection gap and British Money is currently in talks with some of our more forward-thinking lenders who realise this.
“They’re keen to demonstrate to the government they take this issue seriously and financially protect their borrowers, which is what the MMR is all about.”
