Critical business could give ground to income protection because advisers will be obliged by FSA guidance to justify the sale of protection products to their clients, says Edwards.
He believes that income protection is often the better choice for clients but it is undersold. Many advisers have the perception that critical cover is an easier concept to sell, especially when clients see the big lump sum that could be made available after a successful claim.
Edwards says: “It will be interesting to see whether regulation will alter the pattern of protection advice.If you have to justify the sale in terms of customer need, income protection has a good chance of going up but we will not see the result until well into 2005.”
Directly Financial director Stuart Bayliss says: “People are becoming more aware of income protection but it is coming from a very low starting point. I am not convinced that the changes in regulation will lead to a major revolution.”