Almost three-quarters (72%) of advisers believe there is a growing threat people will not have enough life insurance and critical illness cover as fewer intermediaries are selling it, research suggests.
Data from new life and protection firm Specialists4Protection.co.uk identified 8% of advisers saying they had stopped selling life insurance to their clients over the last five years, while 3% planned to do so within the next 12 months.
A further 5% said they intended to stop selling life insurance "at some stage in the future". The corresponding figures for critical illness cover were 8%, 5% and 11% respectively.
The research found the main reason for advisers wanting to stop selling life insurance and critical illness policies was an intention to focus on investments instead. Selling investment products was more effective in enabling them to strengthen their relationship with their clients, they explained.
In addition, about a fifth of advisers (19%) quit the protection market because they did not think there was enough money to be made from selling the products. Specialists4Protection surveyed 51 financial advisers in May 2016.
The firm's managing director Paul Litster 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 some two-fifths [42%] of people with life insurance claiming they only have enough to cover up to two years of their salary, 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
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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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