Lifesearch and Direct Life & Pensions are putting pressure on product providers to backdate any new conditions covered to existing customers in a bid to improve the reputation of the protection industry.
The move follows on from criticism of critical-illness products by chief financial ombudsman Walter Merricks last week.
Lifesearch head of protection Kevin Carr says: “Critical-illness insurance is in desperate need of consumer trust and improving policies retrospectively would be a brilliant way of achieving this.”
Direct Life & Pensions sales and marketing director Richard Verdin says: “Why wouldn’t you do it? We should design out these issues as we tend to over-complicate an already complicated product through financial structures.”
But providers are not convinced that this would be of benefit to consumers as many of the new conditions, which have been added in a recent so-called illness war, will have an impact on only a tiny minority of consumers.
Standard Life protection marketing manager Mick James says: “It is a bit of a marketing gimmick when providers say that they have added new conditions which very few people are ever likely to get.
“These are actually of no material value to the consumer so applying them retrospectively would make little difference.”