MPPI pricing forces brokers to be wary

Massive price differentials in the Mortgage Payment Protection Insurance (MPPI) market means that brokers need to examine their third party relationships closer than ever to ensure that they are getting the best value for their clients.

Recent research from ethical payment protection insurance provider BritishInsurance.com highlighted the huge difference in pricings and included well-known and respected providers. In some cases, there was a difference of up to 45% between the cheapest and the most expensive providers.

Simon Burgess from BritishInsurance says: “Currently, many borrowers are being sold poor value MPPI policies. There is no real reason, except for greed, that more margin could not be taken out of many of the products in the market to provide better value for clients and help those that really need the insurance to afford it.”

It is this greed that is stopping many homeowners from taking out MPPI – leaving them financially vulnerable should they become unable to work due to accident, sickness or unemployment.

Burgess is urging brokers to be aware that there are huge price differentials at work when it comes to MPPI and to ensure that they provide good value to their clients by choosing a reputable policy at an affordable price.

Certainly, Burgess’ MPPI policy – which costs £3.95 for £100 worth of cover for unemployment and disability – is more attractive than that offered by the most expensive lender at £7.70*.

With the protection gap widening, Brokers need to sit up and make themselves accountable to their clients by sourcing them a good deal on MPPI.

* Based on protecting a £100,000 25-year repayment mortgage with a monthly payment of £500 for a 30 year old.