Axa has abandoned plans to launch a life insurance product that guarantees to pay claims in full even if the policyholder has not fully disclosed.
Graham Harvey, managing director, protection, says consumer appetite for a term life policy with an in-built two year non-contestability option was lacking.
The insurer was piloting the option, which comes as standard in the US, with broker LifeSearch and, if successful, planned a nationwide roll-out this year.
It guaranteed full payment on death after a two-year period even if the policyholder had not disclosed important health information on their application form.
"We haven't found it to be successful really," Harvey says. "We tried it out but the truth is we found it difficult to communicate the option with the consumer. It's fallen off the radar."
The issue of non-contestability sparked controversy after the Law Commission proposed in 2007 to introduce a five-year option into protection policies.
It said the move could help remove accidental non-disclosure and boost consumer trust in protection.
But critics argue the move could cause insurers to be more selective about which clients they put on their books.
Paul Bruns and Elaine Parkes
3,000 left to transfer
Record numbers of people aged 90 plus
From 3 to 10 October