Pioneer bridges market gap in payment protection insurance

Pioneer has launched a stripped-down income protection (IP) policy to try and fill the gap in the market caused by the collapse of the payment protection insurance (PPI) market.

The new product, called 'Bills and Things', has consumers deciding which benefit they want between £500 and £1 000, and how long they wish to receive payments for. It will not implement financial underwriting at the application or claims stages.

The product will have a four-week deferred period, own occupation definition and will utilise the same pricing structure as Pioneer's existing Pure Protection product.

Paul Wood, intermediary sales director for Pioneer, said: "This product is aimed at the ASU and budget IP market. We asked ourselves how we could get to the public fast, and the way we decided to do it was by removing financial underwriting at the application and claims stage. All a consumer has to do is prove that they are not unemployed. Our upper limit is £1, 000, meaning that anyone can walk in off the street and get covered straight away."

Pioneer gave the example of a 21 year old man who pays £350 rent a month with outgoings of £169. Asking for £500 of cover with a term of one year, Pioneer said it would cost him £9.99 a month.

There are no medical questions at the beginning with the provider as the new product utilises 'Big T' tele-underwriting by MorganAsh.

The product will be sold via intermediaries.