Post Office offers a Breath of fresh Air

20 June 2006

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The post Office, this week launched a new insurance scheme, which looks set to make PPI linked to loans a thing of the past.

The Policy, called "Lifestyle Protection Insurance" is an independent policy, not linked to any loan or credit card, but will cover the cost of any loanm payments for up to 12 months, if the policyholder is unable to work because of accident or illness.

The product has been welcomed by anylists, in the wake of the publicity surrounding mis-sold and over priced payment protection insurance policies.

Nick White, head of personal finance at comparison website uSwitch.com said:
"For some time now consumers have had a choice between taking their lender’s payment protection insurance or going to an independent insurer such as Paymentcare or British Insurance,

"However, not enough people have been aware that these alternatives to the inflated premiums charged by mainstream lenders existed. The presence and profile of a major high street 'name' in the market should now go a long way towards changing this."

According to the Post Office, its Lifestyle Protection policy will massively undercut rival plans. Cover costs £4.50 per £100 insured per month, compared with a typical £30 per £100 charged on the High Street.

Consumers can insure monthly credit and loan repayments of between £100 and £2,500, up to a maximum of 60% of their gross monthly salary. This includes cover for back and stress-related conditions.

Alan Cook, managing director of the Post Office, says: 'There are concerns that people taking out payment protection insurance are unfairly treated. We want to change that.'

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