Income protection sales increased by 13.5 per cent in 2008, a report by Swiss Re has revealed.
In its annual term and health watch report on the UK protection market, Swiss Re found the number of IP policies sold last year increased by 13.5 per cent to 126,815 from 111,780 in 2007. But polices sold by IFAs dipped by 5 per cent from 61,455 to 58,350. New whole life business also increased by 28.8 per cent from 219,362 policies in 2007 to 282,438 policies in 2008, making it the highest level since 2000.
However, new term assurance sales, including accelerated and critical-illness cover, dipped by 6.1 per cent from 1,541,930 to 1,447,895 policies.
Individual CI sales fell by 4.7 per cent from 536,143 in 2007 to 511,045 in 2008. But the number of CI plans sold through an IFA increased by 2.5 per cent from 237,345 in 2007 to 243,384 in 2008.
Swiss Re life and health technical manager Ron Wheatcroft says despite the increases, the £2.3trn protection gap still stands. He says: “Various industry initiatives are now, at last, beginning to get off the ground but to improve consumer understanding of our services and products, these initiatives need to pull in the same direction.”
Master Adviser IFA Roy McLoughlin says: “The increase in IP is incredibly positive and I would imagine it is related to increased awareness among advisers. The 4.7 per cent drop in CI sales might have something to do with cost and the fact that advisers realise that, out of the two products, IP is arguably the more important product for clients.”