LifeSearch

Sales of long-term life assurance and protection remained flat during Q4 2005 according to ABI figures. The Q4 2004 v 2005 figures are as follows:

Whole of life insurance - 16.7%
Term assurance + 5.7%
Income Protection - 6.9%
Stand alone Critical Illness - 6.2%
Accelerated Critical Illness 0%
Total - 0.5%

Source:Healthcare Insurance Report

Comment of the week

'I am fully behind the Money Marketing campaign and tabled the Early Day Motion as a way of supporting the issue and pressurising the Government and FSA into ensuring consumers realise the lack of protection from non-advised life insurance and protection sales of certain firms such as the big supermarkets.'
Lorely Burt MP
Liberal Democrat small business spokesperson

Villain of the week

Hargreaves Lansdown

Who this week compared buying financial protection to buying a mobile phone. However, buying the wrong mobile phone doesn't quite leave one financially destitute. Buying the wrong life insurance or protection product can - it's even worse than buying a precipice bond. And as with the direct sellers that time, the ombudsman won't help, so the FSA has to do so and our industry takes a pasting yet again.

Yet another marketeer has arrived in yet another financial services market, with little understanding of the issues and no desire to look past the profit forecast to check for possible consumer detriment.

Having understood these issues, LifeSearch knows that around 70% of those who buy life assurance and protection without advice would do it differently if they had received advice. Mark Dampier once said, "The best and worst (product features) should be in the first paragraph of any literature." And so all non-advised literature should state "Remember, if you buy from us without advice you can't later complain to the ombudsman about the suitability of your purchase." in the first paragraph.

Heroes of the week

Britain's MPs

Who are signing up to an Early Day Motion that says:

"This House recognises the importance of life insurance and protection products in helping families to cope financially with the loss of income following bereavement, ill-health or unemployment; acknowledges the need to ensure that when purchasing such life insurance and protection products providers take into consideration the consumer's personal circumstances and the suitability of the product being sold; notes with growing concern the dramatic increase in recent years in the sale of life insurance and other protection products on a non-advised basis and the subsequent potential for large scale mis-buying; is concerned by the general lack of consumer awareness that purchasing such products without advice may restrict their ability to seek redress where products are later found to be unsuitable; and therefore calls on the Government to take action to require those selling without advice to act responsibly by making clear the possible limitations of their product in the context of the other options available, and posting clearer consumer warnings prior to the purchase of life insurance and protection products highlighting the impact of non-advised sales on the level of consumer protection offered."

The Early Day Motion already has cross-party support including Labour, Conservative and Liberal Democrat and we believe that many MPs are now realising that the rise of non-advised sales has occurred while the £2.4tn UK life assurance and protection gap has increased, which only proves the consumer detriment being caused. 

The more widely life insurance and protection is made available without advice, the less of it people actually buy.

Back to Life Insurance Bulletins