The insurance company Zurich has increased the maximum term for its critical illness cover from 30 to 40 years in order to cater for customers with longer mortgages and to better reflect changing retirement patterns.
This extension follows the increasing trend of people taking out mortgages over longer periods to help make their monthly repayments more affordable as house prices continue to rise.
Over the past five years, the average mortgage term has increased from 25.8 years to 27.2, according to the Financial Conduct Authority.
The introduction of the Mortgage Market Review on 26 April 2014, where new affordability rules were brought in, has further accelerated this trend. Zurich says the extension to 40 years allows people to spread payments over a longer term as household finances remain stretched.
Critical illness cover will pay out if you are unable to work through serious illness such as a heart attack or cancer.
Peter Hamilton, head of retail propositions at Zurich, commented: “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.”
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