Protection gurus are putting forward ideas, albeit not at a rate of knots, on how exactly to slaughter the beast. No obvious answer has been unearthed so far but any brainstorming has got to be positive.
Lifesearch has been throwing around the idea of a guaranteed product, a protection policy which, for a little bit more dosh to cover intensive underwriting, would definitely pay out – unless the policyholder was fraudulent.
One side of the fence believes such a product would sell like hotcakes as consumers, wary of the industry, would feel at ease knowing the insurer could not refuse their claim for a heart attack, if they had forgotten to mention an ingrown toenail on their left foot or an ear ache or a dislocated shoulder and so on.
But the other side feels a guaranteed product would make every non-guaranteed product on the market look like a gamble. Why not just fix the current products so they all pay out – isn¹t that what they¹re supposed to do anyway?
Either way the idea is moving forward with Norwich Union last week letting slip it was testing the concept of a guaranteed product with customers on its online forum. No results as yet but I¹ll keep you posted.
Another suggestion on how to kill-off the non-disclosure plaguing the industry involves submitting a client¹s medical records to the insurer alongside their application, with a note saying please refer to my records when underwriting.
Both concepts require more extensive medical evidence at application but the latter is a procedural change rather than a new product and could therefore, in theory, be used for all products across all insurers. This would allow interested consumers to pick from the whole of market rather than choosing NU¹s policy because it¹s the only one on offer.
Admin staff rather than doctors prepare copies of medical records so GPs wouldn’t waste their time with printers and photocopiers. But the underwriter¹s workload will inevitably soar and some insurers will be tempted to whack up premiums to cover this extra cost.
But it is essentially treating customers fairly, is it not, to go through a customers medical records if they are not confident they can provide the correct answers? And can insurers put the cost of premiums up for simply toeing the TCF line? I don¹t know, but the intense price competition the industry has got used to will probably drive them down again within a few weeks anyway.
Let me know what you think about either of these ideas or if you have any new theories on how to do away with non-disclosure please get in touch.