The income protection industry is said to be facing rough times, according to reports by Defaqto, the financial firm.
The ‘Income Protection Insight Report’, which was released this month, stated that people in the UK, are uninsured to the value of £190 billion. The report also pointed out that the level of sales, for income protection insurance has continually fallen, annually.
Income protection is a form of insurance - similar to life insurance - that provides financial assistance for the holder, in the event of them having an injury or illness that stops them from working and earning a living, whereas life insurance provides financial assistance in the event of the policy holder’s death. However Defaqto states that, the complicated nature of the product caused it to be harder for individual financial advisors (IFA) to sell the product to potential policy holders.
The author of the report Ben Heffer, also the principal consultant at Defaqto, said: "Product complexity and affordability are major barriers to sales; the simpler products present greater risk to the insurer and increase costs for the client; achieving a more affordable product for the client inevitably means asking more detailed questions at the application stage."
He added: "IFAs find a income protection insurance difficult to sell because of the combined effects of cost, complexity and perceived lack of need.
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