Within the protection insurance market, income protection is about as complicated as it gets, with considerable differences between the products offered by insurers operating in this market.
Many products are marketed as protecting someone’s income if they are unable to work, but this is an oversimplification. We would all like to think we are covered if we are unable to undertake our current job role however for occupations with a significant level of manual work many insurers will actually use an ‘Activities of Daily Living’ incapacity definition.
With such an incapacity definition a claim is then based on the individual being able to perform a set number of daily activities such as walking, bending or lifting rather than whether they are fit enough to do their current occupation.
Tom Conner, head of protection at Drewberry Income Protection, says:
“Unfortunately, many people are taking out policies with weaker occupation definitions without actually knowing what they are covered for until they speak to an adviser, or go to make a claim.
“It is also the case that some insurers have decided to offer certain workers own occupation cover for the first year or two of a claim and then switch the incapacity definition to working tasks, which is extremely confusing for anyone who isn’t very familiar with this cover.
“In this price sensitive world we are also coming across large numbers of people who have been quoted premiums that rise with age because they are lower now, without anyone even explaining that they rise over time, which is very misleading and just not right.”
Comparison Tool to Aid Consumer Product Research
Drewberry have developed the income protection comparison tool to enable consumers to locate all the information about a policy they would need in order to decide whether that particular plan is right for them, all located in one place and clearly explained.
Some consumers may have been quoted various different policies from different places and want to know how one plan differs from another. For these consumers the tool allows the details of two plans to be compared side-by-side, even bringing up ‘key considerations’ comparing both policies directly.
The tool has not been created to replace an adviser but rather it has been designed to set out the facts about each policy clearly so consumers know exactly what they are being quoted which even includes each insurers claims payout rate.
