Insurer makes move as MPPI point-of-sale ban comes into force
Legal & General has withdrawn its mortgage payment protection insurance (MPPI) product and replaced it with an intermediary-only short-term income protection (IP) proposition.
The insurer has pulled the MPPI product as new rules come into force this month banning advisers from selling accident, sickness and unemployment-style insurance products including payment protection insurance and MPPI at the point of sale of a mortgage.
Mark Holweger, director for Legal & General’s general insurance business, said that as a “responsible” insurer, although the provider continues to believe that MPPI provides “valuable protection” to customers by offering financial support to help meet monthly mortgage payments, “the market is changing”.
In addition to rising unemployment, there is an increased need to cover the cost of monthly rent payments as the number of property rentals grows as people find themselves unable to get onto the property ladder.
The new short-term IP product, Lifestyle Cover, means that for a monthly or annual premium, a monthly benefit is paid at the level an individual has chosen to meet the financial commitments they wish to cover, for up to 12 months, should they not be able to work due to an accident, sickness or involuntary unemployment.
Holweger added: “We are committed to providing transparent and competitive products to our customers and believe that with the strong Legal & General brand, Lifestyle Cover will be a valued insurance solution for our customers looking for the flexibility to protect their lifestyle.”
The MPPI point-of-sale ban is part of the Competition Commission’s PPI order which outlines how PPI can be marketed to customers, how a PPI quote must be laid out and makes it mandatory for customers to receive an annual review setting out the cost of PPI.
The number of short-term IP products on the market has soared over the past year, while there has been a suggestion that a “kite mark” should be developed to make it clear to consumers that it is different from PPI.