Post Offices raises the cost of PPI while cutting cover
The Post Office has increased the cost of its payment protection insurance (PPI), which is provided by AXA.
A flat premium of £4.50 per £100 of cover is being replaced by a premium based on circumstances that can cost up to £6.50 per £100 of cover.
Controversially, cover for existing policyholders is being reduced at the same time.
The Post Office’s Lifestyle Protection policy pays an agreed monthly sum for up to one year in case of accident, sickness or in certain cases of unemployment.
From May, the maximum monthly amount payable will fall from £2,500 to £1,500.
In addition, the first payment will be made 90 days following redundancy, rather than the current 30 days.
The credit crisis and recession have prompted other insurers to make changes to PPI cover at a time when people are more likely to lose their jobs or become too ill to work with stress-related conditions.
Consumer group Which? has blasted back at the industry, accusing it of “moving the goalposts” on PPI and pointing out that insurers have been selling PPI for years, only to cut benefits and increase premiums when people need it the most.
The body’s principal researcher, Teresa Fritz, even suspects that some of the changes have been introduced as a means of reducing exposure by getting people to cancel their policies.
Category: Companies News, Health Insurance News, Insurance News
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