Advisers in the UK are stopping selling life insurance, critical illness and income protection in favour of more lucrative investment planning, research has claimed.
Despite reports on the growing number of people in the UK facing debt as a result of suffering a critical illness, research from Specialists4Protection has revealed advisers are not recommending critical illness cover - or any other protection product.
Research from the new life and protection advisory firm, which launched in October, found 72 per cent of advisers admit there is a growing threat of people not having enough CIC or life insurance.
However, the poll revealed this acknowledgement went hand-in-hand with an admission that 8 per cent of the 51 IFAs polled said they had stopped selling life insurance to clients since 2011.
This is already a huge problem and I fear it will only get worse as access to professional advice dwindles.
A further 8 per cent said they had stopped selling CIC, and 11 per cent say they intend to stop selling CIC to clients.
The main reason for advisers not selling was because they "wanted to focus more on selling investment products", the poll said.
Paul Litster, managing director of Specialists4Protection, 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, or inadequate cover, increases."
Further research among 748 UK adults found 42 per cent of them were seriously under-protected when it came to the insurance cover they did have.
According to the supplementary study among consumers, Specialists4Protection found 42 per cent of individuals with life insurance only had a policy that would protect their families for up to two years' worth of salary.
Mr Litster added: "This is already a huge problem and I fear it will only get worse as access to professional advice dwindles."
Peter le Beau, founder of Le Beau Visage, also believes the demise of selling bolt-on cover with residential mortgages has also led to a lack of take-up.
He explains: "It has been hit by the drop in sales in the mortgage market and the general drop in protection sales."
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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