View more on these topics

‘Income protection needs big overhaul’

Income protection needs urgent simplification, says industry consultancy Le Beau Visage.

Its research has found that IP is grossly undersold, compared with critical-illness cover and mortgage payment protection insurance, due to its perceived complexity.

The survey, conducted with CWC Research and sponsored by Munich Re, shows that CI and MPPI outsell IP by six times.

However, Department for Work and Pensions statistics show that 58 per cent of long-term disability claims are for reasons not covered by CI or MPPI, such as stress and musculo-skeletal disorders.

Le Beau Visage says these claims could be covered by IP, which indicates that IFAs might not be giving best advice on protection cover.

Munich Re proposes that IP sales could be simplified by standardising products, to enable a faster comparison of offerings, and reducing the time taken to complete sales.

Le Beau Visage and CWC believe it would be easier to change IP than either MPPI or CI and warn there is a risk of misselling if no change occurs.

Le Beau Visage director Peter le Beau says: “We have been voices crying in the wilderness on this issue.

“As an industry, we have been talking for years about the reasons why IP has failed to live up to its potential. Now we know what action needs to be taken and we must take it.”

Chadborn Baker & Kearle principal Peter Chadborn says: “I think they are absolutely right. There are so many variations of IP and many clients do not know the first thing about it, even basics like occupational definitions.

“ASU is a bolt-on and it needs to be made clear that this is not income protection. It is sometimes stacked up as a quick sell and it is not a quick sell, it is a complica- ted product.”


Chasers hit Pru hurdle

Endowment complaint firms have had a bit of a bruising recently, which is ironic since they are the ones who are chasing the ambulances.

Egg shuts Fundsdirect

Egg has closed down its Fundsdirect wrap project after failing to find a buyer, saying potential buyers were put off by the investment needed to support the business into profitability.

1.4bn slashed from AIG

American International Group, the world’s largest insurer, has cut 1.4bn from its net worth after detailing a list of accounting misdemeanours dating back to 2000.

Planning now for the residence nil-rate band

Graeme Robb, senior technical manager at Prudential, writes about the residence nil-rate band and the advice opportunities it presents for you when tax year-end planning with your clients. On our Planning Matters hub, we considered a widow, Margaret, and a married couple, John and Anne, for whom the residence nil-rate band (RNRB) is influencing planning […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm