PAYMENT protection insurance (PPI) has come in for a lot of criticism in recent times and is currently being investigated by the Competition Commission, which suspects underhand sales techniques are being used.
PPI is taken out to cover loans, mortgages and various forms of credit. Clouds over the market have led to providers being wary about offering new products, but Dunfermline Building Society is bucking the trend with the launch of what it is describing as a "mortgage payment and lifestyle insurance" (MPLI) product.
Branded "Lifestyle", the product allows people to protect a range of expenditures over and above their mortgage repayments, such as council tax, golf-club membership or pay-TV subscriptions. As the name suggests, customers can tailor the product to suit their lifestyle and it is underwritten by Axa insurance company.
Jeremy Upcroft, general insurance manager at Dunfermline Building Society, said: "We did a lot of research before launching this product and we removed restrictions that were on our old product to make MPLI portable between different mortgage lenders and flexible to fit in with a person's lifestyle."
The customer must have a mortgage account, but not necessarily with Dunfermline. The portability means that if someone chooses to switch lenders they can take MPLI with them. Upcroft says: "Customers can choose how much they want to cover. They can take full accident, sickness and unemployment cover, just accident and sickness or only unemployment cover.
"People can get one-to-one advice on MPLI from a mortgage adviser at a Dunfermline branch or can buy it over the phone from Dunfermline Direct.
"We're not scared by the bad press on PPI - as a mutual we're not regarded as a risky provider. The product's been passed by our compliance team and as part of our commitment to treating customers fairly it is being offered to existing as well as new customers. The government is keen on such products being sold so people are protected."
MPLI customers can insure themselves for up to £2,000 of benefit, as long as this does not exceed 60 per cent of their gross monthly salary. A couple can opt to insure their lives separately to get the maximum benefit.
To make the application process straightforward, Dunfermline does not ask for any proofs of bills and it is up to the customer to declare their personal circumstances at the time of buying the cover.
In the event of a claim, the money will be paid directly to the customer and it will be up to them to ensure they maintain their mortgage repayments with their lender.
