Norwich Union launches new mortgage menu protection policy (trade release)

Article date: 13 August 2001

Norwich Union will be launching (13 August) a new highlyflexible, menu based protection policy to cover the increasingdemand for protection fuelled by the boom in repaymentmortgages.

According to the Council of Mortgage Lenders around 68% of newmortgages are now on a repayment basis. As repayment mortgages donot have protection built in, Norwich Union has designed itsMortgage Life Insurance plan, to offer life insurance and criticalillness, sickness and disability cover.

  • Introductory offer of three per cent discount on Life andIntegrated Critical Illness premiums
  • Flexible and simple – can be changed to meet lifestylechanges
  • Modular structure to identify the cost of each individualcomponent of the plan
  • Before the plan comes into force; (after acceptance) free lifecover between exchange of contracts and completion of thepurchase
  • Joint plan can be split into two single life plans onseparation
  • Full details are available by visiting the website onwww.norwich-union.co.uk or by calling 0800 015 2530

As the trend continues towards repayment mortgages Norwich Unioncommissioned some research amongst working mothers which suggeststhat around 79% of families have life cover to protect theirmortgages, but many of these will be through existing endowmentpolicies. While 44 per cent of mothers worry most about losingtheir health, only 28 per cent of families say they have criticalillness cover. In fact, adults are four times more likely tocontract a serious illness and survive, than they are to die fromthe illness**.

Also, due to the fact that many marriages and partnerships donot last and dissolve, the new Mortgage Life Insurance plan offersthe facility to split into two single plans on separation.

Willie Mowatt, head of protection at Norwich Union, commented:“It is vital that, as repayment mortgages become morepopular, more people are not gambling with their homes.

Mortgage Life Insurance is designed to be flexible and easy tounderstand, as well as highly competitive on rates. The product canbe shaped to fit around people’s changing lifestyles so itmoves with their mortgage and reflects changes in people’scircumstances”.

Norwich Union’s Mortgage Life Insurance offers:

  • Life Insurance: Decreasing cover, to match the outstandingportion of the loan.
  • Terminal Illness benefit: Terminal Illness cover is payable ondiagnosis of a terminal illness where life expectancy is less thanone year. Terminal Illness cover is not paid in the final 18months of the contract.
  • Critical Illness cover (Integrated i.e. decreasing and/orindependent i.e. level): Providing a lump sum on diagnosis of aspecified critical illness.
  • Premium Protection Paying plan payments, if the plan holdercannot work because of illness or injury.
  • Mortgage Payment protection: Paying mortgage payments, if theplan holder cannot work because of illness or injury.
  • Flexibility to cover home improvements and house moves: TheMortgage Life Insurance plan allows a new plan to be taken out atno extra cost to cover a home improvement or new property.
  • Flexibility on separation:

Two people covered by a joint plan can split it into two singlelife plans on separation. This maintains cover if one person takesover the mortgage, or both to buy separate properties.

Notes to Editors

  1. 1 in 4 males and 1 in 6 females aged 30 will suffer a criticalillness such as cancer, heart attack or stroke before the age of65.*
  2. 1 in 10 males and 1 in 33 females aged 30 will suffer a heartattack before they are 65.*
  3. I in 10 males and 1 in 8 females aged 30 will contract cancerbefore they are 65.*
  4. 1 in 21 males and 1 in 32 females aged 30 will have a strokebefore they are 65.*
  5. Despite all this it is estimated that less than 12% of the UKworking population held critical illness policies during2000.*
  • Fieldwork for research undertaken by Norwich Union took placeduring July 2001
  • CGU plc and Norwich Union plc merged on 30 May 2000 to createCGNU plc, the UK’s largest insurance group and one of thetop-five insurers in Europe with substantial positions in othermarkets around the world, making it the world’s sixthlargest insurer based on gross worldwide premiums.
  • CGNU’s principal business activities are long-termsavings, fund management and general insurance, with worldwidepremium income and retail investment sales from ongoing businessof over £27 billion and assets under management of more than £200billion.
  • From October 2000, the combined life and pensions, generalinsurance and retail fund management businesses in the UK operateunder the Norwich Union brand, while the institutional investmentbusiness operates under the Morley Fund Management brand.
  • CGNU’s news releases are available on the internet onthis site
  • A selection of images are available on the CGNU site ofNewscast at www.newscast.co.uk

* Source: GE Frankona – May 2001
** Source: derived from Cancer Registrations, Morbidity in GeneralPractise and Cause of Death Statistics (collated by the Office ofNational Statistics). Adjusted to reflect approximate mortalitytrends to the present day by Swiss Re Life & Health actuariesApril 2000.

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James Evans 08703 66 68 78 07790 487105
Louise Goffee 08703 66 68 70 07747 764342

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