One of Australia’s largest providers of loan protection insurance to the broking industry, ALI Group, has announced some new enhancements to its Loan Protection Plan, a core product offered by brokers.
The improvements allow brokers to better protect their clients in case of financial hardship and are based on feedback from the firm’s broker network plus information gathered through a survey of home owners.
“The feedback we received was that brokers really liked the simplicity of the ALI product – guaranteed acceptance, no medicals, trauma (not typically available in superannuation) and 30 days complimentary cover to protect through the loan process,” Huy Truong, CEO of ALI Group, told Australian Broker
“In addition, they also indicated they liked the simplicity of the lodgement process – paperless, no signatures, and electronic with data transfers from the loan system.”
In terms of areas of improvement, brokers felt the unemployment cover - only for the first year of a policy - was too short, he added.
As a result of this feedback, ALI Group now offers extended coverage for involuntary unemployment, allowing home owners under the Loan Protection Plan to be protected for the first five years of their policy without a subsequent increase in premiums.
“We are committed to improving our offering ongoing to better meet the needs of brokers and their clients. As a result, we are continuously seeking ways to increase the value of our Loan Protection Plan, with improved cover whilst maintaining the affordability of our premiums for the everyday Australian,” noted Truong.
According to data by the Australian Bureau of Statistics, 53,000 fulltime positions were lost in Australia in the month prior to September 2016, he said.
“That, coupled with our very own claims experience, compelled us to increase the Involuntary Unemployment cover period so home buyers can have more opportunities to claim and benefit from Loan Protection Plan. With this is mind, we expect claims to increase five-fold.”
Truong said that almost all broker clients and lenders worried about an individual’s employment security and their ability to meet mortgage repayments.
“By increasing unemployment cover from the first year to the first five years of the policy, the Involuntary Unemployment Benefit allows brokers to discuss employment security risk more directly knowing they now have a more comprehensive solution.”
Additionally, the involuntary unemployment benefit further helps the broker by providing protection to clients that is generally not available elsewhere, he added.
“With this product improvement, we expect to see almost five times the number of claims paid for Involuntary Unemployment Benefit and a further reinforcement to brokers that loan protection is a natural part of the loan discussion and responsible lending where they reduce the risk of their clients experiencing financial hardship.”
ALI Group has also introduced an optional Accidental Injury Benefit which offers up to three months of cover for disabling injuries that prohibit a person from working for more than 30 days.
All changes to the Loan Protection Plan come into effect immediately.
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