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‘Income cover is neglected’

Bright Grey products director Roger Edwards says the protection industry has neglected income protection and consistently failed to solve problems with the product.

Edwards says that despite the industry being aware of flaws in income protection, the Association of British Insurers has focused on critical-illness cover instead. He says it needs to look at alternative product structures that meet customer needs.

He says: “If you consider that the real customer need is for income protection, it does make you wonder why as much effort has not gone into fixing income protection.

“This product has its flaws as well and the industry has been aware of them and has acknowledged them for years, but has consistently failed to solve the problems.”

Sales of income protection last year were down by 10 per cent on the previous year and the product is widely considered to be undersold.

Munich Re head of marketing Will Adler calls IP a “grudge sale” for advisers because he thinks it takes twice as long for an adviser to complete an IP sale as an accelerated CI sale, with both generating similar commission.

Adler says: “In terms of pounds per hour, CI is a far more efficient sale than IP. The same issues arise where the alternative product proposition is mortgage payment protection insurance.

“Either way, IP is almost a grudge sale for many advisers. Not because they do not believe in it but because they cannot afford the time commitment involved in selling it.”

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