Simon Burgess, managing director of britishinsurance.com, has expressed concerns about the Post Office's new payment protection insurance (PPI) product.
The Post Office is charging £4.50 per £100 of cover, covering 60% of gross monthly income, up to a maximum of £2,500 per month.
Burgess said: “This appears, on the face of it, to be great news for the consumer. However, I have very grave concerns because the policy is underwritten by AXA and contains within the small print a 30 day termination clause. This means that cover can be cancelled with only 30 days' notice and consumers will be completely abandoned as was the case with an identical scheme for Biba where thousands of policyholders were abandoned when cover was cancelled by AXA due to ‘poor underwriting results'".
Peter Staddon, head of technical services at Biba, added: "Consumers are potentially exposed to premature termination at only 30 days' notice which is hardly treating them fairly. If AXA and the Post Office were properly committed to offering a fair deal they would have a five year non-cancellable clause which has now become widely available."
