IFAs believe there is a growing threat of people not having life insurance and critical illness cover because fewer intermediaries are selling it.
Research from new life and protection advisory firm Specialists 4 Protection reveals that since 2011, 8% of IFAs say they have stopped selling life insurance with a further 3% planning to do this within the next 12 months.
Another 5% intend to stop selling this at some stage in the future. The corresponding figures for critical illness cover are 8%, 5% and 11% respectively.
The main reason given by IFAs is that they want to focus more on selling investment products "as this is more effective at enabling them to strengthen their relationship with clients". 19% said they stopped because there was not enough money to be made from selling it.
Paul Litster, Managing Director of Specialists 4 Protection, said: “The intermediary market is responsible for a huge level of sales of life and critical illness cover, but as fewer intermediaries are selling this, the problem of people having no cover here or inadequate insurance increases.
“With 42% of people with life insurance claiming that they only have life insurance to cover up to two years of their salary for example, this is already a huge problem and I fear it will only get worse as access to professional advice dwindles.”
Quotes shown are for a 40 year old male who doesn’t smoke. Policy is £100,000 life insurance cover for ten years with a fixed premium. Example is for illustrative purposes only and was correct on 21/11/2016.
The most common form of protection, ordinary term life cover pays a lump sum to your family if you die within a certain time-frame. Most policies will also pay-out if you’re diagnosed with a terminal illness and have less than twelve months to live
Critical Illness Cover provides a cash lump sum if you suffer from a range of serious conditions within a set time-frame. The money is normally used to pay the bills and provide financial security while you’re on the road back to health
If something serious happens to stop you working - for months, years, or even for life – you’ll want to know you have financial security and that the bills are paid. Income Protection gives you just that, paying a percentage of your income all the time you’re unable to work.
The NHS is groaning under the weight of the UK obesity crisis and newer, more effective medical treatments for a range of illnesses often aren’t available. Private medical cover makes ‘going private’ much more affordable – giving you access to more treatments, shorter waiting lists, and first-class care.
Most company directors are savvy enough to have life insurance, but very few realise they can save up to 53% by taking advantage of a Relevant Life plan.
Group Life and / or Health Cover is the most cost-effective way to provide peace of mind and financial security for the families of your employees.
Key Person Insurance - often called Key Man Cover - is an insurance policy bought and owned by a business to protect its own interests. Cover is provided in the event that an important staff member is suddenly unable to work through critical illness and/or death.
Shareholder Protection Insurance is designed to give you peace of mind in the event that a shareholder in a Limited Liability Company, a member of a Limited Liability Partnership (LLP), or a partner in a partnership dies or is diagnosed as critically ill.
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