Lifesearch has developed two guaranteed life insurance products with life companies and is set to test them alongside each other to gauge customer interest.
Both products will require tele-interviewing, a medical and, where necessary, a GP report at the outset but policyholders will be guaranteed a payout if they make a valid claim.
Premiums with one provider will be 10-15 per cent more expensive than an ordinary life insurance policy to cover the cost of the guarantee and underwriting. The other provider will charge a flat rate of £3 more for the extras.
Lifesearch advisers will begin discussing the two products with relevant customers in the next month and aims to test them with around 100 people for each. The two products will be tested concurrently to offer choice for advisers. If the trial is successful, it is likely that he the guaranteed element will be extended to critical-illness insurance.
Money Marketing reported in July that Lifesearch was in talks with life companies about developing a guaranteed product and last month revealed that Norwich Union was researching a similar product and has been testing the concept with customers on its online forum. Neither NU or Lifesearch will confirm whether they are working together.
Lifesearch head of protection strategy Kevin Carr believes a guaranteed protection product would significantly boost consumer confidence. He says: “Given the issues over non-disclosure, we have been working towards an up-front underwriting solution for some time. We are now looking forward to the pilot phase and hope the trials prove to be successful. If so, we could be looking at the end of non-disclosure as we know it, which would be huge step forward for the industry and which would significantly increase the number of claims being paid in future.”