Ageas Protect is calling on protection providers to label their products according to the percentage of life cover, critical-illness and income protection elements included.
Managing director Martin Werth wants the industry to develop a labelling system for protection products which will encourage consumers to take out more comprehensive cover.
His idea is for all protection products to carry a simple bar or pie chart which states the percentage of life cover, critical-illness and income protection elements in a specific product, similar to food labelling requirements which break down salt, sugar and fat content.
Werth says: “The protection gap was always very big and it is only getting wider as a result of what has happened with payment protection insurance.
“When people are aware of the need to take out cover, they tend to use the internet to find what they want and often the only product they know about is term insurance.”
He wants the industry to be more proactive and remind existing customers about the cover they have. He admits this may lead consumers to think that protection is a discretionary spend but he believes regular reminders would help consumers think about what other cover they may need to take out.
Plan Money director Peter Chadborn says: “The downfall of labelling is that product content would need interpreting. For example, if a policy had no score on income protection, this might lead a consumer to think it is not very good but it may be that they do not need income protection because they have good sick pay through work.
“As for regular reminders, it may be that customers cancel as a result but I think the greater likelihood is that this would prompt them to review the cover they have.”