A survey by Capita Insurance Services suggests that 3 in 10 of those who have cancelled or are considering cancelling their payment protection insurance would consider buying a replacement policy.
The negative publicity surrounding the product has been mainly due to the aggressive way it was sold by banks. But many loan customers would consider buying the product again. However, one in four consider the product a luxury rather than an essential purchase.
The Competition Commission is banning point-of-sale payment protection insurance, so that it banks will no longer be able to sell it together with an associated credit product, such as a personal loan.
The survey shows that many consumers would buy cover. The challenge is for insurers to develop affordable, practical cover that is easily understandable.
Income protection insurance: News update: 19 November 2010