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British Insurance sets up IP and PPI hybrid

British Insurance is offering a new type of income protection product which is a hybrid of IP and payment protection insurance and charges a flat rate premium for every customer.

The product, set up by British Insurance subsidiary Safety-first, will pay out for up to 30 years and is believed to be the first hybrid of IP and PPI.

It will charge a flat rate of £5 for every £100 of monthly benefit to all policyholders regardless of age, gender or occupation.

British Insurance aims to sell 100 policies a day and says clients will know if their application has been accepted within 30 minutes of completing a medical questionnaire.

Managing director Simon Burgess estimates that 10 per cent of applications will be rejected due to pre-existing conditions such as diabetes, high blood pressure or obesity.

He says: “The key is simplicity and speed. This product sits between short-term and long-term income protection. It does not provide every answer but it is a good step in the right direction.”

Lifesearch head of protection strategy Kevin Carr says: “We welcome anything that would simplify the IP market and will move consumers away from PPI towards IP but how many of the negative parts of PPI will the policy contain?”

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