Aviva has developed an alternative payment protection insurance product in a bid to distance its offering from the damaged reputation of the PPI sector.
The product has been branded as short-term income protection and Aviva says it has kept the FSA informed of the product’s development to ensure it is compliant.
It will offer cover option to pay out in the event of accident, sickness, unemployment, and/or a fixed amount of life cover.
Product features such as waiting periods and the level of benefit can be changed at any time and the policy is annually renewable. Aviva will launch the product through Leeds Building Society call centres and a number of other distribution partners in May and will review at a later stage whether it will be offered through IFAs.
An Aviva spokesman says: “We are continuously improving our products and our new Stip product has been designed to reflect the changing nature of the market.”
Last week the British Bankers’ Association lost a judicial review against the FSA and the Financial Ombudsman Service challenging PPI redress measures.
Plan Money director Peter Chadborn says: “This seems like a viable product because PPI would not have sold in the levels that it did if the concept was not right. The issues arose as a result of the way PPI was sold and this simplified income protection product could work where full-blown income protection is not an option.”