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Protection news
Whole of Friends Provident paid out £36
market advice
million in CI
Paymentshield's Sandy
Friends Provident has announced of claims declined due to non-dis-
T
circle6
he results also showed that:
that it paid out £36 million in criti- closure fell by nearly 40 per cent
Over half of claims paid were for
McPherson comments.
cal illness claims in 2008. (2.5 percentage points) to 4 per
Of the 691 claims received, 87.3 cent and 8.7 per cent of claims were
circle6
cancer
The average critical illness payout
The government is taking some
per cent were paid and 12.7 per declined due to the definition not
solace in the fact that the latest
cent were declined. The percentage being met.
circle6
was over £59,000
The largest claim paid in 2008
unemployment figures show that
jobless numbers have not Breakdown of main causes of claims
circle6
was £0.5 million
The average age of a claimant
breached the psychologically Cause of claim 2008 claims 2007 claims
important two million figure. It is
Cancer 55% 62%
certain to be short-lived relief
Cardiovascular 12% 12%
circle6
was 44 years
The average length a policy was
with most commentators
Stroke 5% 6%
in force for all claims received
expecting the total amount of
Multiple Sclerosis 4% 5%
unemployed to breach the three
Children's critical illness 4% 2%
circle6
was 4.5 years
The youngest claimant was aged
Benign brain tumour 3% 1% 21, the claim was for cancer and
million mark by the end of the
Others 17% 12% the payment was £66,000.
year.
The despair of the
dispossessed and the
repossessed is considerable Young people are ignoring life cover
while the action offered as aid by
the government has obvious The number of young people who low. Yet despite this price advan- circle6 43,000 lives were protected last
shortcomings. Comparison are buying life cover and other tage young people are not purchas- year, up by 13 per cent from
website
MoneyExpert.com has forms of financial protection is at ing protection products in
revealed that more than 900,000 an all-time low. significant numbers. circle6
2008
Overall business increased by 20
homeowners have missed at Figures for 2008 released by For example, a Life Insurance per cent from 2007 to 2008
least one mortgage repayment in LifeSearch show that only 3 per policy over a 30 year term would LifeSearch policy adviser, Matt
the last six months – the first cent of all protection policies writ- be £1,548 more expensive if it was Morris, said: "Clearly more effort
serious warning sign pointing ten by the company during this bought at age 35 rather than age needs to be made to reach younger
towards repossession. period were bought by young peo- 25 (for a healthy non-smoking people. Many younger people have
At the same time a new study ple. male looking for £100,000 of level debts, mortgages and families that
by the Centre for Policy Studies Life insurance, Critical Illness term assurance). need financial protection in the
has come to the conclusion that and Income Protection are just A number of other interesting event of the main income provider
trumpeted measures aimed at three protection policies that are statistics also emerged in the being unable to work. Often they
saving homeowners from less expensive for younger people
Lif
repossession will have ‘little (age 25 and under), not only
circle6
eSearch sales review: either buy no financial protection
Critical Illness Cover sales are at all or rely on the internet to get
effect‘. This is unsurprising when because of age, but also because
you consider the call for lenders younger people are likely to be
circle6
up 37 per cent from 2007 the best deal. That might work
The average premium rose by with car insurance, but not with
to allow homeowners to defer healthier, which keeps premiums
£5.43 to £28.09 in 2008 financial protection."
their mortgage payments or pay
interest rather than capital will
only serve to leave homeowners
saddled with increased long-
Stop selling single premium PPI
term debt.
The Financial Services Authority FSA's managing director of retail ficult time. However, our focus
Overlooked in the furor
(FSA) has written to all firms still markets, reminds firms that the remains on how this product has
surrounding the wider PPI
selling single premium Payment Competition Commission's final been, and continues to be, sold and
market has been the importance
Protection Insurance with unse- report on its PPI market inquiry, whether consumers have been
that mortgage payment
cured personal loans (SP PPI UPL) published on 29 January, included treated fairly during the sales
protection insurance (MPPI) has
asking them to withdraw the prod- a remedy that prohibits the sale of process.
to play in avoiding heartache for
uct as soon as possible, and by no single premium PPI policies after 1 "We therefore request that if
homeowners. With some lenders
later than 29 May. October 2010. your firm has not already done so,
now abandoning single premium
The letter, which has been sent It continues: it stops selling single premium PPI
MPPI, coupled with new
to chief executives, follows the "We recognise the severity of the with unsecured personal loans as
arrangements whereby anyone
decision in January by a number of current economic climate and the soon as possible and in any event
quoting on PPI must wait 14 days
major banks to step selling SP PPI financial problems many con- by 29 May 2009. In view of our
before contacting the customer, a
UPL. Some of these firms, along sumers are facing. Moreover, we ongoing concerns across the single
fantastic opportunity exists for
with other market players, now believe that PPI can play an impor- premium market over the standard
brokers to boost their bottom
line by offering a valuable and
offer or plan to offer regular pre- tant and legitimate role to cover of sales, we believe this request is
cost-effective whole-of-market
mium PPI instead of a single pre- repayments on specific credit justified to bring an orderly with-
service.
mium product. agreements for consumers facing drawal of single premium PPI
The letter from Jon Pain, the job loss, or other issues at this dif- from the market."
March 2009 Mortgage Introducer
www.mortgageintroducer.com
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