Defaqto calls on insurers to offer uncomplicated product
Income protection insurance has an essential role to play in providing financial security, according to financial product research company Defaqto.
In its latest report, Income Protection Insurance 2007– A time for action not words, the company has called for insurers and advisers to show greater commitment to this protection product.
Defaqto saids that it not only protected an individual’s current standard of living, but also his future financial well-being, should accident or illness strike and he is unable to work.
However, analysis by Defaqto reveals that sales levels are continuing to decline, indicating that insufficient numbers of consumers appreciate the need to protect themselves against the financial consequences of a loss of income.
This shows that providers need to offer uncomplicated, low cost products that provide attractive alternatives to payment protection insurance policies.
Report author Nick Telfer, Defaqto’s head of life and protection, said “I recognise that some insurers have taken steps to simplify the application process but still more needs to be done to improve the appeal of the product itself.
"Besides being intrinsically complicated, comparisons between different provider offerings are extremely difficult
"The industry needs to rethink both how to improve the general appeal of the product and how the product itself can be developed to meet the differing levels of needs that exist in the market”.