Whether you are an IFA, directly authorised firm or an appointed representative, selling mortgage payment protection insurance has certainly raised a few questions over recent months.
Negative headlines in the press have done nothing to install confidence in either adviser or consumer when it comes to selling and buying MPPI. Although MPPI itself has not been so heavily criticised in the press, its association by name to the costly loan and credit card PPI sold by some of the high-street banks that have been branded a rip-off has led to general negativity surrounding the product.
This is despite the fact that both the FSA and the OFT have, within the last two weeks, admitted that PPI can provide worthwhile cover for some of your customers. Then there are issues regarding the misselling of MPPI and the potentially crippling financial and reputational consequences of an FSA fine.
All this at a time when MPPI should be a serious consideration for first-time buyers who are needing to borrow more than ever and financially stretch themselves to the limit to get a foot on the property ladder.
So, as a mortgage adviser, what are your options?
You could abandon MPPI altogether and concentrate on providing your customers with some form of mortgage protection through life or critical-illness insurance. What happens, though, for instance, if three months after you arrange a mortgage for a self-employed customer, they suffer a serious accident and cannot work again for six months? Your customer will not be able to get any help from state benefits during this period and if they do not have alternative income or savings to fall back on, they might be in serious financial difficulty, putting their new home at risk.
Life and critical-illness cover are valuable products in their own right but they would be of no benefit in these circumstances. As the FSA states: ‘PPI can provide valuable protection against changes in personal circumstances.” Besides not being able to offer your customers a complete choice of mortgage-related insurance options, you would also be denying yourself an additional income stream for your business.
A far better option would be to team up with a product supplier that encompasses the principal of treating customers fairly by providing a stand-alone product that is good value, gives excellent levels of cover, utilises a fully compliant system that ensures customer eligibility for cover is checked at point of sale and handles claims in a fair and efficient manner.
Provided that a mortgage adviser has the backing of such a product supplier, confidence in MPPI sales will return and the customer can be offered a choice of insurance products that will allow them to make an informed decision on what is the best cover for their circumstances.
Securah is a product supplier that is able to offer exactly this and more. The Securah MPPI product offers some of the best levels of cover available at a very low cost to the customer. The Securah system allows online sales to be completed in a compliant manner and the firm provides the back-up support for Advisers that you would expect from a first-class product supplier.
Part of our support offering is the provision of MPPI clinics designed to help you understand the product better so that you can provide clear information . The clinics allow you to offer MPPI to customers with confidence by ensuring you are clear on all aspects of the sales process, from ascertaining a customer’s suitability for cover to explaining certain elements of cover.
The clinics will also focus on the claims process which is a fundamental part of any insurance policy. We really want distributors of Securah MPPI to be able to see the whole process all the way through to when a customer makes a claim. A thorough understanding of the product can only lead to one thing – more customers with suitable mortgage protection and a happier adviser.
At a time when every man and their dog seems to have an opinion on the value (or lack of) payment protection, we believe that a proactive approach to promoting the real benefits to advisers who can subsequently communicate more efficiently with consumers can go some way to improving the negative view. Isn’t it time that brokers were given the full picture rather than being blighted by the endless negative stories surrounding PPI?
We welcome all to our clinics – brokers and other providers – as working together can only be good for the industry. Paul Dunlop
Head of sales Securah London