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Broker hits the ceiling over NU&#39s housewife limit

Surrey IFA Gary Festa is infuriated by what he describes as Norwich Union “playing God” by refusing to provide more than £400,000 in cover to a housewife looking to take out a stand-alone decreasing term insurance policy.

Norwich Union says it has imposed a ceiling of £500,000 for all non-working partners, not just housewives, due to a lack of reinsurance capacity.

Festa, who is a partner with Hoyland Financial Management, says he recently put in the application for mortgage protection for a high-earning husband and his wife wanting £750,000 of cover.

After completing a financial questionnaire and extra medical questions, he was told that only £400,000 cover could be offered for the wife as there was a £500,000 cap and she had around £100,000 worth of cover with another insurer.

Festa says: “I am just gobsmacked with it all. I do not see how they can play God and dictate what they offer by what other policies people have. Those policies could be covering other risks.

“I cannot get over their arrogance. They take us through all this financial underwriting when they know they are not going to accept it, painting me into a corner so I have to accept it.”

NU spokesman James Evans says: “We are looking at The Exchange, where the policy was quoted, to see if we can make it clearer or better for IFAs in the future.”

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