1 Simples, isn’t it?
The newly-proposed ‘simple’ life cover product should indeed be quite simple. It will exclude indexation, guaranteed insurability options, waiver of premium, accidental death benefit, decreasing cover, joint life, future alterations, conversion options and also terminal illness benefit. But what about underwriting?
Without it, the cost is notably increased and the product attracts people who perhaps can’t get cover elsewhere, raising the cost further. But with it, the buying process remains far from simple, which is perhaps the more important issue because life cover was already a fairly simple product anyway.
There are a number of challenges here and, if they get the underwriting approach right, it could work really well. Either way, advisers may well have a better product to recommend and/or a better process. VERDICT: Promising lead
2. Life insurance is still sold and not bought (apparently)
Is it still right to say life insurance is sold and not bought? A poll suggests it is. In a recent survey of advisers, life offices and reinsurers, The Protection Review asked if the purchase process was still a case of ‘selling’ despite rapid technology developments and younger savvier consumers.
Three quarters of respondents (76.7%) said ‘yes’, which suggests that either the UK insurance industry operates in some form of bubble compared to the rest of society, or that there hasn’t been much in the way of technology in the protection industry. Or perhaps a bit of both. VERDICT: Back to the lab
3. G-Day changes gathering pace
At the time of writing, Bright Grey, Scottish Provident, Zurich, LV= and Legal & General have responded to the opening shot from Ageas in terms of announcing their adviser plans for G-day on 21 December.
With less than 90 days to go, these announcements are to be welcomed and we should expect more from other insurers soon – preferably the sooner the better so that advisers can plan ahead and make sure client expectations are met. VERDICT: Promising lead
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4. Does TV advertising means it’s OK to ‘shoot the messenger’?
Not so long ago, Aviva was criticised by some sections of the public on social media sites for promoting the very real benefits of income protection insurance during the not-quite-so-real drama series Downton Abbey: ‘How dare you interrupt my nice Sunday night TV with dark adverts about people having accidents’ was the typical response (which I always found interesting given people were dying at war during Downton itself).
However, more recently St John’s Ambulance has been advertising considerably more graphic examples of accidents and serious illness, yet without the public outcry. It seems society is happy to accept such messages from charities, but not from insurers, even on a Sunday night. VERDICT: Back to the lab
5. Mixed messages?
The FSA has published a new guide to explain how advice is changing under the RDR, which is good.
However, its booklet for consumers doesn’t mention protection. Does this imply that the regulator doesn’t think advice is necessary for protection? Let’s hope not. Let’s just hope they continue to keep protection separate to the RDR for the overall good of consumers. VERDICT: Back to the lab
