Friday, 24 October 2008

Households Exposed


Norwich Union has and withdrawn unemployment-only cover.

The move could mean tens of thousands of households are left exposed and unable to meet their mortgage payments if they are made redundant from their jobs.

It comes as exclusive research for revealed that premiums for this type of insurance have increased 17 per cent in the past year.

Norwich Union has disclosed it no longer offers unemployment-only cover available through its partnerships with Paymentshield and Select & Protect. And it refused to rule out extending this policy to other partnerships.

Norwich Union's cover pays out to workers who are made redundant and covers their mortgage payments for up to 12 months.

Unemployment is rising at its fastest rate for 17 years and is heading toward the two million mark, according to latest figures. The financial services and construction industries have been particularly badly hit by the credit crisis.

Research revealed the cost of unemployment cover has increased from £3.07 per £100 to £3.58 per £100.

A spokesman for Norwich Union confirmed the products had been withdrawn, saying: "We are responding to current market conditions and as an insurer we want to balance the risk of our portfolio."

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