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NDF joins the cafe society

NDF Administration has entered the protection market after stockmarket uncertainty dulled people&#39s appetite for investment products. Its first offering, Home Protect, is a cafeteria-style protection package that brings together a range of products from other companies.

Prudential has been chosen to provide term insurance, critical-illness cover and the sickness and accident element of mortgage payment protection insurance. The unemployment element of MPPI is provided by Hamiltons while buildings and contents insurance is provided by Teachers Assurance.

A condition of the product is that at least £10,000 of life cover must be taken out alongside any other element chosen by the policyholder.

IFAs think Home Protect may be a launch pad for NDF to offer other packaged protection products. They say the protection market is very premium-driven but cafeteria-style products are difficult to compare on this basis. As a result, IFAs may be more likely to put together their own package for clients after comparing prices on quotation systems such as The Exchange.

A 30-year-old non-smoking male requiring stand-alone critical-illness cover on a £100,000 sum assured over a 25-year term would pay £13.03 with NDF in the first year but premiums increase almost every year during the term.

IFA Guy Jones of Berwick Devoil Healthcare likes the concept of Home Protect and thinks its critical-illness premiums are initially cheap. But he thinks it is expensive in the later years. For example, the monthly premium for year 25 would be £45.73 based on current rates. The same cover on the same basis with Scottish Provident would currently cost £25.17 a month but premiums would not increase annually. For clients who do not need the £10,000 life cover, premiums would reduce to £23.45.

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