News Review: Protection Two in five families significantly affected by illness


by Kevin Carr chief executive of the Protection Review and MD of Kevin Carr Consulting


more than two in five (42%) uK families have been significantly affected by illness, with 25% of those having had one of the main breadwinners un- able to work due to illness, research from aviva has re- vealed. a further 15% had expe- rienced a family member being off work due to stress, depression or mental health issues, while 7% had a family member who had to give up work to care for a close relative. Yet, when it came to financial protection against such events, just 7% felt their families were fully protected, while just


11% had any income protec- tion. the full results can


be found in the aviva Family Finances report, which was published in January and coincides with the firm’s national tV advertising cam- paign mentioned here last month. We’ve all similar statistics


over the years, but these days we also know that paid claim rates across the board are averaging in excess of 90%. So what is the bar-


rier? there is a clear need for protection insurance, the state is providing less and less, products are gen- erally less expensive than before, and a higher propor- tion of claims are being paid than ever before. When the mortgage market picks up protection sales must follow suit.


Is ‘low-start’ the new future of protection?


Ageas Protect has launched a life and critical illness product which provides cover at a lower initial cost that rises over time. The protection provider, formerly known as


Fortis Life, rebranded earlier this year and is keen to make a mark on the mortgage protec- tion market with this new product, especially with first time buyers. Low Start customers can buy the level of


cover they need at a lower premium, which gradually increases at a guaranteed rate for the period of the cover. For a 35 year old male non-


smoker taking out £150,000 of cover over a 15 year term, Low Start Term Assurance would cost an initial premium of £6.83 per month compared to the YourLife Plan premium of £10.17. Low Start Critical Illness with Term Assurance would cost £22.50 per month initially in comparison to the YourLife Plan premium of £35.11. Anything that helps drive customers towards


buying the cover they need should be wel- comed, and I wouldn’t be surprised if we see more protection products of this kind in the future.


“When it came to financial protection against such events, just 7% felt their families were fully protected, while just 11% had any income protection… there is a clear need for pro- tection insurance, the state is providing less and less, products are generally less expen- sive than before, and a higher proportion of claims are being paid than ever before. When the mortgage market picks up protection sales must follow suit.”


News in brief • Financial Secretary to


the Treasury, Mark Hoban, says Income Protection should be one of the first Simple Financial Products (SFPs) made available to consumers • Zurich UK Life reported that 91% of all critical illness claims received in 2010 were paid • Aviva is building on the success of the IPTF Income Protection roadshows by announcing a number of their own events in the coming months • LifeSearch has announced the shortlists for its annual Protection Awards with Ageas, Axa and PruProtect leading the way • Scottish Provident’s critical illness plan has been awarded a 5-star rating by Defaqto for the seventh year running • Reinsurer RGA has added Mark Johnson as business development manager to its marketing team • According to Legal & General the UK business protection gap remains at £1.1 trillion • LV= has appointed Iain Clark, formerly of Legal & General and PruProtect, as director of protection • Andy Briggs is to replace Trevor Matthews as Friends Provident chief executive


16 mortgage introducer MARCH 2011


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