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Permanent&#39s critical mortgage

Tuesday, 27th March 2001.



Permanent

Critical Illness Mortgage

Type: Critical illness cover.

Minimum premium: £10 per month.

Maximum cover: No maximum.

Illnesses covered: Cancer, heart attack, stroke, major organ transplant, multiple sclerosis, kidney failure, coronary artery bypass, Alzheimers, angioplasty, aorta graft surgery, benign brain tumour, blindness, coma, Creutzfeld-Jakob disease, heart valve replacement or repair, HIV — blood transfusion, HIV — needlestick injury, loss of independent existence, loss of limbs, loss of speech, meningitis, motor neurone disease, paralysis/paraplegia, Parkinson’s disease, rheumatoid arthritis, terminal illness, third degree burns, permanent total disability before age 65.

Minimum-maximum ages: 18-65 for term assurance, 70 for whole of life.

Charges: None.

Options: Increase in cover without further underwriting.

Commission: Initial — whole of life 31.25 per cent of premium, term assurance 43.75 per cent, renewal 2.5 per cent.

Tel: 0800 0286222.

Broker Panel:-

Roy Rutter – Principal, Aptitude Financial Planning

Peter Overy – Principal, Overy & Booth

Gordon Upsall – Partner, Standard Securities

Kevin Morre – Consultant, Pier Financial

Broker Ratings:-

Company&#39s reputation: 8.2

Premium rates: 6.4

Range of illnesses: 8.4

Flexibility: 8.0

Charges: 7.3

Commission: 6.5

Product literature: 7.9

Permanent Insurance has unveiled its&#39 Critical Illness Mortgage product, providing cover for a wide range of conditions.

Considering how well the plan fits into the market, the panel is largely in agreement.

Overy says: “Provided premiums are competitive, then it should fit very well. For clients who would prefer the opportunity of a small return at the end of the term, this would be an ideal mortgage protection plan – provided investment returns are reasonable.”

Moore says: “As critical illness becomes more popular, so the Permanent product will increasingly fit into the market place. Cost has always been a factor in critical illness, and provided that the premiums are affordable, the plan should have a good take-up rate.”

Rutter adds: “There are plenty of players in this market, but still scope for this plan which has one or two particular features.”

Upsall simply feels that the plan will compliment mortgage sales.

Turning to the type of client the plan is suitable for, Rutter lists: “Those reviewing their life cover, moving house or just remortgaging. Younger clients who may have life cover only without critical illness. Switchers from endowment to repayment.”

Upsall says: “Ideal for most clients, but particularly younger lives taking out their first loan.”

Overy feels that it will be useful for any client involved in house purchase or remortgage scenarios.

Moore quantifies his response: “Very dependent on individual circumstances. Single homebuyers are very suitable for this product as they are less concerned with death cover protection for their mortgage.”

There is a difference of opinion when the panel looks at the type of marketing opportunities provided by the product.

Upsall does not think it will provide any opportunities for his particular firm, while Overy says: “Many clients are turning to repayment mortgages due to the bad press for endowments – this plan would suit those clients.”

Moore has a similar feeling: “Many opportunities exist for existing homeowners who now wish to include critical illness for their repayment mortgages. The increase in the number of product providers will undoubtedly create competition, drive down the rates and open the market to more clients.”

Rutter thinks marketing opportunities will be: “Mainly through annual client reviews or linked to a remortgage. However, I am not an enthusiast of unit-linking for protection products.”

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