Despite Financial Services Authority (FSA) and the Office of Fair Trading (OFT) both admitting their concerns about payment protection insurance (PPI), and MPPI, Aidan Plumridge, marketing and business development manager at Cassidy Davis, argued that single premium policies have a rightful place in the market. He said: “Choice is a good thing and that is what single premium MPPI offers.
“The MPPI market has developed considerably over the past year or so which has lead to increased flexibility, choice and affordability of the product. It’s true that the pricing of some single premium policies is too high. But if you offer a competitively priced product, with a fair refund policy and providing certainty of cover over a fixed period; it is a viable alternative to monthly renewable plans.”
However, Plumridge admitted that single premium MPPI was not suitable for everyone, and urged them to take caution when deciding upon a policy. He added: “It is vital the client is made aware of the extra cost involved as the premium is often added to the total interest the client pays. As the typical life of a mortgage is between three to five years, a single premium to cover this period may ideally suit the borrower that is approaching the limit of their total expenditure.”
However, David Quick, managing director at CETA, disagreed and said there was no room for the products. “I’m dead against single premium products – they are a rip-off. They offer no value and give the sector bad press.”
