David Quick, Managing Director at CETA, explains: “At the moment, most mortgage brokers have a limited number of options when selecting an ASU policy for their clients and it’s often a case of making the client fit the product rather than the other way around. The new FSA rules state brokers must identify the needs of their clients and take into account their existing circumstances, before recommending a product. This means carrying out a fact find and producing a quotation based on the clients needs and affordability.
“Take, for example, a Government employee who is entitled to full pay for 6 months if they fall ill. An appropriate ASU policy for such a client, taking into account their needs and circumstances, would provide back to day one cover for unemployment and a 180 day deferment period for accident and sickness. For a broker to sell a standard product in these circumstances would run the risk of mis-selling. Unfortunately, most general insurance sourcing systems cannot tailor ASU policies in this way.”
CETA’s ASU quotation system incorporates a specially designed fact which enables brokers to fully establish the needs of their client. The system then matches the client’s needs against a range of policies which can be tailored to the client’s specific circumstances. Accident and sickness or unemployment cover can be put in place with back to day one cover and up to 30, 60, 90, 120 and 180 day deferment periods. For example, clients can opt for back to day one cover for unemployment and 180 days deferment period for accident and sickness.
CETA’s policies will protect not only mortgage repayments but also rent, council tax payments, utility bills, HP/loans and credit cards, other insurance premiums and school fees. Cover is available up to a maximum of £2,500 or 60% of gross salary, for periods of 12 or 24 months.
David Quick concluded: “Not only are CETA’s range of ASU policies market leading in terms of their competitiveness, flexibility, breadth of cover and choice of options, but with effect from the New Year we will also be paying brokers commission of up to 30%.”