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Direct Line defends price-based life cover campaign

Direct Line is defending itself against allegations that it is selling inadequate critical-illness cover alongside life insurance.

Protection specialist Lifesearch hit out against Direct Line last week, accusing it of selling CI cover on price alone and using TV advertising to encourage consumers to replace older policies.

Lifesearch claims that Direct Line is misleading consumers by failing to explain the implication of buying a CI product based on reviewable rates.

But Direct Line says as it is an execution-only broker, it is not in the business of giving advice and intends to continue competing on price.

Direct Line spokeswoman Gill Murphy says the TV campaign&#39s main focus is on reaching people without life insurance. She says it highlights the phone number where callers can apply for life cover but also where they can see if they could save on existing life cover or critical insurance.

Murphy says: “Our life cover contracts have guaranteed rates and there has been a significant reduction in the costs of life cover in recent years. Furthermore, in relation to life cover with critical illness, the terms of our policies are very clear and customers will be able to make their own assessment as to whether they want to replace one contract with another.”

Thameside IFAs adviser Andrew Gattward says: “As long as your client has no medical history or does not intend to claim, there is no problem but when it comes to making a claim, Direct Line can be a nightmare.”


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