By Leo Bland Permanent Insurance and Legal & General are slashing protection rates in the latest ro...
By Leo Bland
Permanent Insurance and Legal
& General are slashing protection rates in the latest round of price cuts in the health cover market.
Permanent is cutting premiums on its income protection products by up to 45%, and Legal & General is cutting the cost of its mortgage payment protection insurance by up to 16%.
For a non-smoking male aged 45 next birthday in a class three occupation, Permanent's income protection rates fall to £57.71 from £82.16. This rate cut applies to index-linked benefit of £300 per week terminating at the age of 60 with a deferred period of 26 weeks.
For a similar professional male seeking the same level of benefit with a four-week deferred period, monthly rates fall to £21 from £25.46. Monthly premiums for a female aged 45 next birthday in a professional occupation choosing index-linked benefit of £300 per week terminating at age 60, fall to £40.16 from £43.05. Benefits on this policy would be deferred for four weeks. For a similar female in a class two occupation seeking the same benefit levels with a 26-week deferred period, rates fall to £79.80 from £80.06.
Andrew Chapman, managing director at Permanent, said: "With continued reductions in UK State provision and dramatic growth in the number of self-employed and contracted staff, it is more important than ever for people to have income protection cover."
Legal & General's cuts mean a typical homebuyer with mortgage payments of £300 per month
will pay £15.75 pm for the insurer's mortgage payment protection. The life office is also revamping its mortgage payment protection insurance to move in line with the ABI/ Council of Mortgage Lenders benchmark standards introduced at the start of July.
The group has removed its maximum benefit restriction as well as exclusions to disability cover, such as pregancy complications, HIV, backache, stress and mental disorders. Waiting periods for unemployment on the policy have been cut from 90 days and 180 days to 60 and 120 days respectively.
Gareth Hoskin, retail marketing director at Legal & General, said: "Statistics show that people are more likely to be off work for six months or more due to an accident or illness than to die before reaching age 65. If someone is made redundant or suffers a serious illness or injury, mortgage payment protection insurance can help ease the financial burden at a critical time, so that person can concentrate on recovering or seeking alternative employment without the additional worry of finding the money to meet their mortgage payments every month."
