UK general insurer Norwich Union has slashed the prices of its mortgage life insurance range, introducing further competition into the insurance market.
According to a press release, the protection re-price now places 87% of Norwich Union mortgage life insurance (MLI) policies among the top three low-cost providers, compared to 20% before the price cuts.
Mortgage life protection pays out a decreasing lump sum on death during the plan term. The plan has no cash in value at any time and the cost will depend on the level and period of cover chosen, in addition to the customer’s personal circumstances.
Darren Dicks, head of protection marketing for Norwich Union, said: As mortgage repayments are increasing, some people are feeling the pinch and there is evidence to suggest that some may even be sacrificing protection payments in order to cope with rising housing costs. This year’s Swiss Re Term and Health watch report highlights that 51% of term policies were mortgage-related in 2006, compared to 58% in 2005, which suggests this could be starting to happen.
This is something we advise strongly against, which is why we are constantly reviewing all of our protection products to enable us to stay as competitive as possible within this market. Furthermore, decreasing policies such as MLI generally offer customers a more affordable option, as the cover reduces along with the mortgage, so people should not need to take the risk of going without insurance, Mr Dicks continued.