Brown said the proposal is “going in the opposite direction” at a time when the industry is trying to boost innovation by looking at hybrid products, such as adding IP on to CI.
He said: “Given that virtually every innovation involves some kind of hybrid between income protection and CI, why are we being forced down a route by the ABI to not move towards that solution? They are going down a different route by saying to consumers, we are going to fit you into pigeonholes that may not pay the same number of claims.”
He said the ABI should keep occupational-basis TPD and put IP into CI. By doing so he said: “You can manage the claim, decide which ones are genuine TPD claims and manage your CI cover. There are a significant proportion of people who go down with an illness that only occupational TPD will address.”
But Lifesearch managing director Tom Baigrie said: “Everyone needs IP. CI is an expense on top of that primary need and should be voluntary, so tacking the basic cover on to the luxury product is wrong. It is a clumsy way of doing it.”