Nationwide has become the latest company to offer an alternative payment protection insurance product branded as short-term income protection.
The building society launched its Lifestyle Protector product last week which allows customers to set the level of cover they require for unemployment, accident and sickness, or all three.
The product has been underwritten by Pinnacle Insurance and can be used to cover monthly outgoing such as mortgage or rental payments, utility bills, and gym membership fees.
Customers can choose waiting period of 14, 30, 60, 90 or 180 days and can flex the benefit amount as needed.
It is available on a six or 12 month term and pays a maximum benefit of £2,500 a month, or 60 per cent of gross monthly income, whichever is lowest. Unemployment cover only pays a maximum benefit of £2,000.
Benefits are paid directly to customers and life cover of up to £30,000 is included.
Eligible customers need to be UK residents aged between 18 and 65, and need to have worked for the same employer for six continuous months at the start of the policy for at least 16 hours a week.
A spokesman for Nationwide says: “It does what PPI was supposed to do, but the good thing is the flexibility. PPI was quite rigid in what it did but with Lifestyle Protector customers can tailor their benefits according to what they need.”
Lifestyle Protector will be offered on an advised basis in Nationwide branches and on the telephone on a non-advised basis. It is not available through IFAs.
In April Aviva revealed that it had developed a short-term income protection product offering cover in the event of accident, sickness, unemployment and/or a fixed amount of life cover.