The biggest barrier to protection sales is a poor reputation, according to Nick Kirwan, chair of the ABI Protection Committee.
Kirwan says people need protection now more than ever whether it is life insurance, critical illness cover or payment protection insurance.
Speaking at the Mortgage Expo in Manchester yesterday, Kirwan says the ABI Committee is discussing ways to improve the reputation of the protection market.
“The biggest barrier to protection sales is the reputation the market has,” he says. “This is down to declining claims and there are two reasons for this: non-disclosure and people not being clear on what they are covered against.
“We live in a buy now, pay later society, but people do not have the savings to fall back on when the worst happens. When someone is critically ill, too ill to work, or their child is ill, people are going to face a financial crisis.”
However, Kirwan says the ABI Protection Committee is taking steps to improve the situation.
He says the Committee has developed a New Statement of Best Practice which focuses particularly on making sure definitions are clearer, and has published a consumer guide.
The Committee is also looking in detail at Total Permanent Disability (TPD) and income protection.
He says: “Sales of income protection do very poorly against both critical illness and life insurance, so we are asking: how can we breathe fresh life into this?
“What we really need to do is to change hearts and minds. We need to change the attitude of advisers. We need them to be saying: yes, actually there is a need for income protection for my clients.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Scott Sinclair on 020 7034 2636 or email [email protected]IFAonline
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