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Lifesearch critical of Direct Line campaign

Protection specialist Life-Search has slammed rival Direct Line for encouraging consumers to trade in their critical-illness policies for cheaper new cover.

Lifesearch believes Direct Line&#39s television advertising campaign is misleading consumers, encouraging them to replace their existing cover with cheaper policies.

Lifesearch senior technical adviser Kevin Carr says selling critical-illness cover on price alone is wrong and that newer policies are often not the best deal. He says cover such as Direct Line&#39s product is sold on reviewable rates, which means its price can increase at any time.

The majority of existing CI policies are based on guaranteed rates and include conditions where the definition has been tightened since the policy was sold.

Direct Line customers are sold CI policies that only offer any occupation cover rather than own occupation cover.

Carr says this point is crucial as if a policyholder is unable to work following illness or accident, they will only be covered if they are unable to do any job rather than their own previous occupation.

He says: “We do not want to create a misselling scandal but I would go as far as saying that we are extremely concerned that people are being sold inappropriate products.”

Direct Line spokesman Gill Murphy says: “Lifesearch has its own interests to look after here. Our new advertising campaign is targeting those who either do not have life insurance or to encourage those who do have life insurance to switch to us. Yes, we do offer critical-illness cover as well but would encourage people to consider the CI product they already have.”


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Old Mutual Asset Managers – Old Mutual US Specialist Equity Fund

Type: Hedge fund Aim: Growth by investing long and short in US companies with a market cap of more than $2bn Minimum investment: Lump sum £100,000, $100,000, euros 100,000 Investment split:100% in US equities Place of registration: Cayman Islands Charges: Annual 1.5%, performance fee 20% Commission: None Tel: 0808 1002715

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