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Norwich Union underwrites MPPI

Norwich Union has ushered in its mortgage & payment protection insurance, a mortgage payment protection insurance plan that tailors premiums to the individual&#39s circumstances.

Unlike most plans, which follow a one size fits all approach, this plan is based on underwriting. So a borrower&#39s age, occupation and sex will have a bearing on the premiums they pay, as well as the deferred period and benefit term.

Policyholders can choose to take accident and sickness cover only, unemployment cover only or both types of cover. There is a choice of deferred period between 30, 60 or 90 days, with a choice of a benefit payment term of 12, 18 or 24 months.

The Norwich Union plan offers more choice in terms of deferred period and benefit payment term than Berkeley Alexander&#39s freesafe mortgage payment protection insurance. This only has a 30-day or 60-day waiting period, with benefit payment terms of 12 or 24 months. The Berkley Alexander plan does not base premiums on underwriting, but it appears more expensive than Norwich Union.

A 29-year-old permanently employed computer analyst who is an existing borrower, requiring monthly benefit payable on a 30-day basis for 12 months, would pay £4.58 for every £100 of cover for accident, sickness and unemployment benefit with Norwich Union and £5.25 for every £100 of cover with Berkeley Alexander&#39s plan.

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