Increase in Mortgage Payment Protection Premium

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NavanMan1

Registered User
Messages
59
Hi,
Just got a letter in from Cardif Pinnacle informing me that my monthly premium for Mortgage Payment Protection insurance will increase next month by 45% ! ! ! wtf

Means now that I am paying 6.75 for every 100 euro covered.

And in the event of a claim, the cover is only good for 12 months, so I am asking myself is it really worth it ?

What do other think ?
 
I remember seeing someone posting here about the huge increase in claims on these policies - which might account for the huge hike in your premiums.

The way I see it is this:

1. How much is your monthly mortgage repayment x 12? How does this compare to the amount you'll pay in premiums?
2. How much savinsg do you have to cover your mortgage if you lost your job?
3. How likely is it that you'll lose your job?
 
I'm thinking how could someone who has been on AAM a long time and is pretty financially astute buy one of these policies?
 
They said they increased the amount to cover the increase in claims they are getting. Looking through the terms and conditions I noticed that they can increase the premiums at any stage of the policy (even after its active).

I had an arguement with a member of AAM about this product as I felt that there is a market for this kind of cover and that the financial ombudsman would protect clients if the company tried to invalid claims unfairly. I still do, but it should be marketed to those not worried about losing their jobs. Some people like to pay for peace of mind, look at travel insurance or Life Assurance . We dont neccessarily have to have them, but some people like having more cover then others.

Many people have assumed that this is a policy that will screw its clients, without any facts or information to properly back up their arguments. Over time, the truth is that I dont have enough confidence in this product to recommend it to anybody.

I discussed this product with many brokers and consultants and the general consensus I found was that this product is a knightmare waiting to happen. Only in time will we know if it was unfair to the company or if concerns were correct.

My advice is to read ALL THE TERMS AND CONDITIONS OF THE PRODUCT.

Only you can answer whether or not the cover is worth it . .
 
"it should be marketed to those not worried"

The primary product distributed through intermediaries would be Cardif Pinnacle's one but it is the intermediaries who are marketing the product in a way that will bring disrepute to the industry. Google it, look at the adverts look at the web sites.

Northdrum you are correct about emphasizing the read the T&C bit (should we recommend they both read and understand the T&Cs) but here it appears we have a financially astute AAM reader who had such an opportunity and would have been aware of the restrictions but still bought.

Someone here once said they had clients who took out the policy knowing it was a pig in a poke but they were prepared to take a punt on it. If these same people also feel they have the safety net of the Ombudsman then they are not really taking a gamble as they probably feel an entitlement to compensation coming on.

The Ombudsman shouldn't be used in this way. The Financial Regulator should be ensuring these intermediaries are complying with their code of conduct and fairness in advertising is just one facet. The code is there to protect consumers be they financially astute or clueless.

We know things are wrong now so there is no need to wait until the industry can be labeled with yet another misselling scandal when appropriate action can be taken now.
 
Sumatra said:
"it should be marketed to those not worried"

The primary product distributed through intermediaries would be Cardif Pinnacle's one but it is the intermediaries who are marketing the product in a way that will bring disrepute to the industry. Google it, look at the adverts look at the web sites.

Northdrum you are correct about emphasizing the read the T&C bit (should we recommend they both read and understand the T&Cs) but here it appears we have a financially astute AAM reader who had such an opportunity and would have been aware of the restrictions but still bought.

Someone here once said they had clients who took out the policy knowing it was a pig in a poke but they were prepared to take a punt on it. If these same people also feel they have the safety net of the Ombudsman then they are not really taking a gamble as they probably feel an entitlement to compensation coming on.

The Ombudsman shouldn't be used in this way. The Financial Regulator should be ensuring these intermediaries are complying with their code of conduct and fairness in advertising is just one facet. The code is there to protect consumers be they financially astute or clueless.

We know things are wrong now so there is no need to wait until the industry can be labeled with yet another misselling scandal when appropriate action can be taken now.
Click to expand...

I suppose my problem with certain accusations on this product would be assuming that ALL intermediaries are selling it with devious intentions of simply making comission. Theres alot of cynics (to put it mildly) on AAM! Its very difficult to defend your profession (or even your own intentions professionaly) when some people lump you in a bracket that makes it difficult to refute personally.

There are pitfalls to most things we buy and most products in my industry. I agree that its an advisors job to point out those pitfalls, but its not an advisors job to choose what a client should and should not do (unless the client doesnt even want to discuss their options!)!

I have said it before if I chose not to advise on any products I have some sort of contention with , I wouldnt be able to give advice on anything. Its up to me to highlight these imperfections to the client and for them to decide on whether to proceed. Personally I would love a shakeup of the industry and would love my particular profession to be fee based (as opposed to comission based) so that intermediaries were known for their impartiality , as opposed to where they could get the most comission.

I do agree that there are obvious flaws that point to problems down the road on MPP and I do believe that there will be issues arising when the claims increase. That said, is it right to just assume that Cardiff will not payout in the case of fair claims (were terms and conditions are met). Or is the main gripe many on AAM have is that it is and will be missold and not properly regulated. . (again bare in mind I have chosen not to offer it to clients ! ! !) . .

Great point by Towger by the way . . .
 
Re: ALL (some) intermediaries are selling it with devious intentions

"ALL intermediaries are selling it with devious intentions of simply making comission. "

Hand on heart, if there was correct supervision of intermediaries they wouldn't be able to sell it the way they are selling it. The consumer just cant rely on certain basic standards of good business conduct and integrity from some (I didn't say all) intermediaries.

"Theres alot of cynics (to put it mildly) on AAM!"

I'm not too cynical to appreciate the essential goodness of others but I'm glad to hear that you too have grown to distrust the product and no longer sell it.

"That said, is it right to just assume that Cardiff will not payout in the case of fair claims (were terms and conditions are met). "

No I didn't say that. What I said was the application of the conditions in today's economic climate makes claiming difficult. To be fair to the consumer I would prefer to see these policies underwritten at proposal stage rather than claim stage. Anyone say why that couldn't that be done?

P.S Navanman1 - I don't think you could have bought the product ;)
 
Re: ALL (some) intermediaries are selling it with devious intentions

Sumatra said:
"ALL intermediaries are selling it with devious intentions of simply making comission. "

Hand on heart, if there was correct supervision of intermediaries they wouldn't be able to sell it the way they are selling it. The consumer just cant rely on certain basic standards of good business conduct and integrity from some (I didn't say all) intermediaries.

"Theres alot of cynics (to put it mildly) on AAM!"

I'm not too cynical to appreciate the essential goodness of others but I'm glad to hear that you too have grown to distrust the product and no longer sell it.

"That said, is it right to just assume that Cardiff will not payout in the case of fair claims (were terms and conditions are met). "

No I didn't say that. What I said was the application of the conditions in today's economic climate makes claiming difficult. To be fair to the consumer I would prefer to see these policies underwritten at proposal stage rather than claim stage. Anyone say why that couldn't that be done?

P.S Navanman1 - I don't think you could have bought the product ;)
Click to expand...

Wasnt really directing that post at you directly Sumatra, apologies if you took it as that . .

I dont have a problem with anybody being cynical about people they dont know, Im a complete cynic when it comes to capitalism and politics in this country. Likewise I dont expect anybody to simply put their faith in a profession they dont understand. I do think there are people in my profession who take advantage of those ignorant or uneducated to the specifics of products (it truely annoys me that I get lumped in the same bracket as them, but thats just human nature, when we dont understand something we feel vunerable in, we generally assume the worst and attach stigmas to all in that area that we distrust).

Its just hard to try to be impartial about something only to be accused of pushing a vested interest when you truely think you are trying to just layout the way you see something (and let others interpret a product). I dont believe this to be a bad product sold in the correct manner, my main problem is that general Joe Soaps buying it MIGHT never truely understand the T & C's to make a well balanced judgement on whether or not they should take out the cover or indeed if they even qualify for it . .
 
No worries Northdrum

What are your views on " ..would prefer to see these policies underwritten at proposal stage rather than claim stage."
 
Have read with interest the replies to my query. Another fact to bear in mind is that I took out this policy in 2004, so I can't see how they could refuse a claim five years on, on the basis that I had knowledge that I was been made redundant. In fact, have changed employers since the policy was taken out.

Phoned them up and asked them to send me out the T&C’s of the policy, what’s covered and what’s excluded etc.

While I had some time on my hands, I went online and got a few quick quotes from insure.ie & clickandinsure.ie for the same product, I got back quotes which are almost 50% cheaper than the new premium that Cardif Pinnacle propose to charge me next month.

So will wait for the T&C’s in the post to do a comparison and see if I can make a valid comparison.
 
Sumatra said:
No worries Northdrum

What are your views on " ..would prefer to see these policies underwritten at proposal stage rather than claim stage."
Click to expand...

I agree with this point. It takes out uncertainty surrounding who is actually an appropriate candidate for this cover (ie who will get paid in event of claim).

I did argue with somebody about this point before (I think I missed their point on underwriting, but see what they meant now), but in light of events since then I feel this is definantly something that would build more confidence & Credibility in the product with brokers and clients.
 
Cheers Northdrum.

Navanman1, not familiar with the policy details going back to 2004. The fact that product was launched to mass market of brokers last autumn as a 'lucrative' source of income bugged me

One of their UK claim forms for employed persons but interesting all the same [broken link removed] esp Q14/16
 
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