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Shepherds Friendly has launched a no-risk five-year cover mortgage payment protection insurance policy.

The mutual insurer believes this is the first policy of its type that will help counteract the negative publicity payment protection has recently received. The friendly society said as the policy has no hidden costs, no risk of penalties and a promise to pay out, it should help to restore consumers' trust in the industry.

Shepherds Friendly, well known as an income protection provider, said the policy would ensure the majority of customers are covered for the full term of special mortgage deals.

As tele-underwriting is conducted by a qualified nurse at the point of sale, the insurer said claims would be dealt with quickly and efficiently as it would have gathered all the necessary information.

By using a medical professional, Shepherds said it would also eliminate uncomfortable conversations about medical issues between the client and an IFA.

Geoffrey Spencer, chief executive of Shepherds Friendly, said: "Following the consumer backlash and regulatory clampdown against PPI providers that have been misleading consumers with their MPPI policies, we wanted to offer a product that intermediaries can be confident about selling.

"Our product has been genuinely developed to protect the consumer, which is why it provides cover for the full term of the special period, up to five years, ensuring the customer feels confident that they are properly covered."

Alan Lakey, partner of Hemel Hempstead-based IFA Highclere Financial Services, said the product was forward thinking for such a small society.

He said: "I am really impressed. It sounds almost like a hybrid of an income protection and an MPPI product. This is something the industry has been crying out for."