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&#39Income products best for protection&#39

Income-based protection products are more suitable for the vast majority of consumers than lump-sum products, according to protection IFA LifeSearch.

It says that although over 95 per cent of all protection products bought are lump-sum-based, nearly all consumers would find better value in an income-based product such as income protection or family income benefit.

LifeSearch&#39s fourth protection report says consumers feel more comfortable buying lump sum life cover as they have heard of it. The report points out that family income benefit is cheaper than lump sum life cover and provides cover for consumers when they really need it.

The report also predicts that the guaranteed rate market will survive for the next few years and says that with new providers entering the market, consumer choice is starting to widen.

It reveals that new types of product are being developed to bridge the gap between critical-illness cover and income protection as the number of new policies being taken is beginning to fall.

Senior technical adviser Kevin Carr says: “Well over 95 per cent of all products bought in the protection market are lump-sum-based but there is a flaw here as a lump sum does not last very long once it has been invested. If you use it to clear your debts, then what is left?

“An income-based product is much better value but is sold by very few mortgage companies as it is too complex. We believe they should start selling it.”


Woolwich Plan Managers – Accelerated Growth Bond

Type: Capital protected bond Aim: Growth linked to the performance of the FTSE 100 index Minimum-maximum investment: £3,000-£500,000, Isa £7,000 Term: Six years Return: 700 per cent growth in the index up to 63% Guarantee: Original capital returned in full providing the FTSE 100 index does not fall by more than 50 per cent without […]

Select & Protect selected by Whitechurch

Slect& Protect has been appointed as one of the providers being used for home and mortgage payment protection insurance to The Whitechurch Network&#39s members. Select & Protect chief executive Simon Hood says: “Whitechurch has been successful in maintaining their approach to the choices the market offers by being flexible and offering compliance expertisek secong to […]

Life companies struggle for IFA repeat business

Some life insurers are finding it harder to get repeat business from IFAs, according to data from financial research company Henry Samuels Marketing Services. Most life companies gain high penetration levels within the intermediary sector, with some product providers used by 90 per cent or more of the IFA population. But only a small number […]

Advisers to be examined on LTCI

New requirements for long-term care insurance come into effect on October 31 making all LTCI policies subject to FSA regulation. The new rules ensure an enhanced level of protection of all LTCI products including insurance-only pure protection and investment-based products. The changes include pre and post sale requirements, risk warnings and enhanced training and competence […]

'Feeling the Squeeze'

Royal London carried out a UK wide survey with 2,500 consumers age 35-44 over the summer. The survey found that over a third, 34 per cent, said their finances felt Squeezed and so were struggling to meet day-to-day expenses, despite 87 per cent being aware that they need to save more. However, the survey did […]


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