In the past five years, the average mortgage term has increased from 25.8 years to 27.2 meaning insurers have to increase critical illness maximum terms
Getting on the property market is difficult enough today with the cost of housing increasing, especially if you live in London. To keep mortgage repayments lower consumers are opting to take out mortgages over longer terms. So it is no surprise that protection insurers would have to change with the times and today Zurich has announced it has increased the maximum terms for its critical illness policies.
The Council of Mortgage Lenders recently published data showing that a record number of consumers took out 30-year mortgages in the second quarter of 2014. During the period 20 per cent of house purchase loans (19,300), had a term over 30 years, compared to 27,000, or 18 per cent, in the previous quarter, according to CML.
Zurich stated that the Mortgage Market Review has further accelerated this trend, by allowing people to spread payments over a longer term as household finances remain stretched.
Peter Hamilton, head of retail propositions, said: “We have listened to advisers and customers, and we are pleased to be able to offer them extended protection, without them having to worry about rising premiums or whether or not they will be able to secure cover in later years.
“It is important for us to be able to respond to a constantly shifting market by offering simple and straightforward solutions.”