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Product matters

Twelve months ago, Scottish Provident stood alone in the “menu-based” flexible protection market but over the last year four others have entered.

The added competition can only be good news as insurers play catch-up or pass Scottish Provident.

The recent enhancements made by Friends Provident echo what is already available elsewhere, with one exception – personal pension stand-alone waiver of premium. This is a condition of having a stakeholder or personal pension with Friends but can also be extended to other plans as well as a spouse&#39s pension.

Other additions highlight the weakness of “menu-based” products, in that the best income-protection provider (which Friends tells us it is) is rarely the best critical-illness cover provider.

The reduction in the survival period from 28 days to 14 days is one crucial milestone for this becoming an acceptable critical illness policy. Unemploy-ment cover and child- ren&#39s CI cover add depth while adding illnesses such as CJD and progressive supra nuclear palsy, which may medically be covered under other conditions ,are merely window-dressing.

Other “menu-based” providers should take note from Friends, which not only recognises its weaknesses, but does something about them.

On a topical note, and one where Friends is not alone, all aspects of its plan exclude war & civil commotion. The industry seems split on this exclusion and, while not one of the key reasons to recommend a policy, it does show the detailed differences we need to be aware of.

Steve Petrie is a consultant at John Joseph Financial Services

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