The chairman of the All-Party Parliamentary Group on insurance and financial services has warned that income protection take-up is being damaged because the word itself is “toxic”.
Conservative MP for Cardiff North Jonathan Evans says two-thirds of products sold are taken out by employers on behalf of their staff, while total penetration is estimated at just 11 per cent.
He says: “It’s not that the product is toxic, but it’s the way that the product is viewed amongst the public.
“Every ten minutes on day-time TV we are being told that protection is a bad thing because of the context of payment protection insurance.”
He adds: “In 2015 all political parties are agreed that the welfare state is going to contract and it’s therefore necessary that we start to stimulate a proper participation market and yet we are struggling to do that against this backdrop.
“We can either invent another word or be much more proactive in encouraging people to take this on.”
One topic floated by attendees at this week’s APPG meeting was that of launching a compulsory scheme, similar to the auto-enrolment programme for pensions which kicked off in 2012.
ABI figures show that for 2013 members of the trade body faced 13,170 income protection claims, with 91.1 per cent paid out by insurers.