The cover – Omega – is underwritten by Holloway Friendly and Assurant Solutions and covers mortgage payments for the full mortgage term, or to the age of 60. It is transferable across mortgages if the customer decides to move or remortgage and the premium is not subject to occupation, age, gender or smokers’ ratings.
David Macgregor, chief executive of Holloway Friendly, said: “Intermediaries have been waiting for this product for a long time. So many households do not have any form of mortgage payment protection cover and until now there has not been such a suitable product providing comprehensive cover that bridges this massive gap in the market.”
Ben Fish, group chief executive of Commitments Protection Ltd, said: “For the first time consumers have access to a product that will give them payment protection for the full term of their mortgage. If a customer becomes ill in the second month of the contract and was ill for the next 25 years, the product would pay out for the whole of that period. There is no other product that will give them such payment protection.”
Fish added: “There is some criticism of accident, sickness and unemployment (ASU) cover because it fails to deliver longer-term mortgage payment protection. The FSA has made it known it is concerned about the potential mis-selling of ASU, where longer-term benefit would be more appropriate for the client.”
But James Cotton, mortgage specialist at London & Country, said: “It’s difficult to see who this is pitched at. I assume it’s aimed at the higher-risk end considering the lack of underwriting or loading. It’s not the first long-term cover against a loss of income.”
