Legal and General have this week announced a new short-term income protection product to replace the controversial payment protection insurance.
Lifestyle Cover is described as offering customers more flexibility and is specifically linked to the customer’s income as opposed to a specific credit agreement as with payment protection insurance.
The launch of the new product comes after a review of the payment protection market where it was discovered over two thirds of people don’t have any insurance in place to help cover their general cost of living should they lose their jobs or become unable to work.
There is a general concern people are being discouraged from taking out income protection insurance following the PPI mis selling scandal.
Payment protection insurance was taken out with a loan or credit card with the intention of protecting the policyholder should they become unable to work and meet their monthly repayments due to redundancy or illness. However many customers were mis sold a policy thus causing the current nationwide controversy.
Frequent victims of PPI mis selling were the self employed and customers with a pre existing medical condition, both of whom would have been unlikely to be able to make a valid claim against their PPI policy.
Other customers were pressured into taking a policy with lenders implying their credit agreement may not be approved without such a policy while others were completely unaware they had a policy to begin with as the lender has simply automatically added it to their credit agreement without consent.
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