Partnership Home Loans has launched the first fully medically underwritten impaired health equity release product
The lender says its home reversion plan could benefit 40% of equity release customers annually giving them more than a conventional equity release plan.
Steve Groves, chief finance office at Partnership Home Loans, says the lender is able to lend greater amounts to potential equity release customers who may be in poor health based on medical data collected by parent company Partnership Assurance, which allows it to fully medically underwrite each customer and determine their life expectancy.
The plan allows anyone from the ages of 55 to 96 to take out a plan, with a minimum release value of £25,000. The plan is available on all properties worth £80,000 and above with no top limit, no medical is required and there are three payment options including lump sum, income or lump sum and income.
Medical conditions that might provide enhanced benefits include cancer, heart disease, stroke emphysema, Paknson’s disease, AIDs or renal failure among others.
An additional feature of the plan is that those over the age of 80 with serious long term car needs are catered for. Groves says unlike other home reversion plans where there is often a clause allowing the lender to take possession of the property when the customer goes into long term care, Partnership Home Loans’ plan is designed to enable customers to receive long term care in their own home and that the product can also be taken out specifically to fund long term care needs.
Groves says: “Every year over 9000 people taking out equity release scheme miss out on potential cash because their health is not taken into account. The price difference can be very dramatic especially for more severe health conditions and with a large proportion of equity release schemes being used to fund healthcare we anticipate our new plan heaving significant positive impact on the equity release market.”
Groves adds an equity release plan is due to be launch some time in the third quarter of this year following the successful launch of the home reversion plan. He adds that while he expects some competition from providers to come eventually it is more likely that for the time being other providers may distribute Partnership Home Loans home reversion plan in order to offer a complete range of options. Groves also sees providers adding a ‘tick box’ health care check system to their products in order to offer more but says this will not be enough to allow them to offer the sane as a product that is fully underwritten.Dean Mirfin, business development director at Key Retirement Solutions, welcomed the launch of the plan, saying "The principle behind the product is good. Other providers have dabbled with looking at life expectancy but have not had much luck. "The only thing is many customers may not want to hear that they can get a better deal on the basis that they have a shorter life expectancy."
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