The Income Protection Task Force has developed a draft charter for the industry to consider which aims to get more customers to buy IP.
The IPTF is calling for a quality standard for the product that will differentiate it from payment protection insurance and reassure them the policy meets minimum standards. The IPTF says IP is applicable to around 20 million people in the UK.
Part of the charter includes an effort to create a campaign like the US’s “Disability Awareness” that heightens consumers’ and employers’ attention about the value of income protection insurance.
The IPTF is calling for providers to pay all IP claims promptly and to publish claims paid figures annually, to make sure policy wordings are easy to understand and to ensure own occupation definitions are available wherever appropriate.
The IPTF has also called for the industry to develop a simple IP product and to work together with the Department for Work and Pensions to produce an annual sick pay statement so the public know what their entitlements are.
IPTF co-chairman Peter Le Beau says: “It is clear that the advent of simple products is widely seen as a potential opportunity to significantly increase the amount of income protection written and things like claims disclosure and plain English wordings will enable consumers to have a much better understanding of what the product offers and why it is likely to pay all valid claims.
“What the industry must do is to decide how big the available market is and how they can streamline their processes to take advantage of it.”