British Insurance has brought another market leading product to market, offering income payment protection insurance at a fraction of the cost of competitors and providing best value to younger applicants.
The insurance premium payable is tapered according to age, taking account of the changing risks associated with different age groups. This ensures younger policyholders are not subsiding older insured’s and for 18 to 25 year olds, cover is available at only £2.75 per £100 of cover.
The policy will pay up to £1000 or 50% of your gross monthly income, whichever is the smaller. The cover provides benefits on a back to day one basis, and will also pay out on a pro-rata basis for every day of an incomplete month that is missed through incapacity or unemployment.
This means that if you are off work for one month and 12 days, you will receive a full month benefits along with a payment for 12/30ths of the monthly benefit.
Simon Burgess, Managing Director at British Insurance says: “Our new income payment protection policy is designed to offer an affordable, understandable and fair level of cover to customers.”
“Borrowers are under increasing pressure to meet mortgage payments and ongoing expenses, and having this type of cover in place means an unexpected period of illness or unemployment should not knock them off their financial tracks. Whether through incapacity or unemployment it is easy for people to get into financial problems and few have spare financial resources to deal with such a problem.”
British Insurance claim that the new product is significantly cheaper than others in the market and by rating the premium according to age, younger policyholders avoid bearing the burden of the greater risk posed by older clients under cover.
Most other policies in the market are level rated and while this means older customers get a good deal, it also means that younger policyholders have to pay for them.
Premiums were determined at the outset of a policy and so younger policyholders would benefit, as they grew older.
Rates Available for a 30-year-old customer:
Provider Rate Per £100
British Insurance £3.40
Pay Protect £3.49
Post Office £4.50
Income protection: News update: July 2007