British Money extends Universal Cover criteria

The director of British Money said: “My research found that only 46 per cent of UK lenders discuss or offer financial support mechanisms toborrowers, so it is no surprise to find the take-up so low.”

The new policy – for customers taking out a loan, finance agreement, and those with a new mortgage or re-mortgaging their properties – offers three months free cover and no excess or exclusion period. It also offers a discrimination-free premium of £5 for every £100 of cover, regardless of age, occupation, smoking habits or medical history, and accepts claims following the onset of a wide range of conditions.

Mr Burgess added: “It’s non-discriminatory, covers the self-employed, contract workers and those working full-time, and our immediate payout provision, with no exclusion periods, reduces the likelihood of debts building up.”

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Steve Devine, chairman of the Protect Association, said the policy “will go some way in re-building the credibility of providers”.

Craig Palfrey, managing director at Cardiff-based Penguin Wealth, said: “This is potentially great for people with health issues – for most people this is actually expensive life insurance.

“You would also have to question why most younger people, especially those with no kids, would want life insurance on a loan – is this potentially the next PPI issue? Will people be properly advised that this is in with the product [loan or mortgage]?”