Bulletin 25, 2006
Round up
0 - the number of life insurance rate changes since the last bulletin
8% - the decrease in the UK divorce rate in 2005
75% - the percentage of financial advisers who would recommend clients reduce the sum assured on their life insurance rather than buying a cheaper inferior critical illness policy, according to research from Skandia
£50,000 - the yearly amount a man should be earning before women consider them successful and wealthy, according to research from NS&I
Body Mass Index
Once again BMI has featured heavily in the press and on television this week. Last year we reported the growing influence, for want of a better phrase, that BMI is having on the life insurance industry, in particular where cheaper priced providers are treating overweight and obese consumers more harshly than other providers who seem a little bit more expensive at first.
What happens here, for example, is that the cheapest life insurance company might quote £20 per month but could then double the premium after underwriting based upon the client's height and weight. A company quoting £25pm to start with may apply a smaller increase, or might not increase the price at all, saving the consumer thousands of pounds over the term of the life insurance policy.
This is a further example of the value that a good life insurance adviser can add. What concerns us most, is that with no adviser in the loop to position and explain the life assurance underwriting process and any likely increase in premium, what do consumers do when they look to buy without advice when the price is doubled after three months of underwriting seemingly for no reason? We think they get thoroughly frustrated and end up buying no life insurance at all, which helps nobody.
Cover Poll
Following the FSA’s latest mystery shopping exercise that failed to distinguish between IFAs and tied advisers, do you think the regulator is treating advisers fairly?
42.9% don’t think the FSA is treating advisers fairly
57.1% believe that treatment is fair
The next poll asks whether a life insurance/protection product paying out on the financial implications of an illness or an injury may cause would be a welcome innovation.
Comment of the week
'The figures from our research cast some doubt over whether newer style critical illness plans that have payouts linked to the severity of the illness will be popular with advisers. These policies can offer cheaper cover but will only pay out if an illness is considered serious enough by the provider. With an increasing number of direct-to-consumer financial services organisations, such as internet banks and supermarkets, trying to encourage more people to sign up to basic, non-advised critical illness policies, there is a danger that people will end up with policies that don’t meet their needs. The role of advice in the critical illness market has never been more important.'
Alison Turner-Homes,
Protection Marketing Manager, Skandia
Hero of the week
Scottish Provident
Following the acquisition of Scottish Provident, Resolution plc is actively seeking to recruit 200 staff in Customer Service roles, for its newly branded office in Glasgow.
It's been long time coming but this could be the beginning of a return to their former glory days for this life insurance provider.Back to Life Insurance Bulletins
