launches flat rate income protection has launched a flat rate income protection product that promises to make a massive impact on the income protection market.

Income protection, which pays a regular income in the event of policyholders being unable to work due to long-term sickness or disability, has struggled to fulfil its sales potential as a result of being too complex for consumers to understand and too time-consuming for intermediaries to sell.

Standard income protection policyholders can be charged different premium rates according to factors such as their age, occupation, smoking habits and gender.

They can also have to wait several weeks for the underwriting process to be completed before their cover starts.

But the product from charges everyone the same flat rate of 5 a month per 100 of monthly cover.

Policies are arranged instantly, although around 10% of applicants are declined on the basis of their answers to a brief medical questionnaire.

The approach is similar to that used for payment protection insurance, but the big difference is that will pay out for up to 30 years whereas payment protection typically pays out for a maximum of one year.

Simon Burgess, managing director of, says: Even ardent supporters of standard income protection acknowledge that it could benefit from being as simple as payment protection, and this approach gives the best of both worlds.

The Income Protection Task Force and the Association of British Insurers Protection Committee, which are both trying to devise a product formula to boost income protection sales, should find we have already provided most of the answers.