Legal & General has improved its Mortgage Decreasing Term Assurance (MDTA) product to offer a range of different interest rates on which the cover is based.
MDTA is designed to cover a mortgage debt and the sum assured decreases over the term of the policy, roughly in line with the mortgage as the capital is repaid. Previously, Legal & General based its pricing on one interest rate, but now there will be four to allow more flexibility according to requirements, budget and appetite for risk.
A lower interest rate will offer lower premiums but a higher interest rate will offer more cover.
Bonnie Burns of Legal & General says, "Some customers want cheap monthly premiums and will be happy not to hedge against possible high interest rates in the future. Others, particularly those for business protection, may want to choose a higher interest on which their cover is based and will be happy to pay more for that added peace of mind."