Simple term life insurance and income replacement products have been proposed in an independent steering group report to encourage consumer engagement with the industry.
The group, set up by the government, published the initial recommendations entitled Review of Simple Financial Products, as announced by the financial secretary to the Treasury, Mark Hoban announced today.
Carol Sergeant, chair of the Simple Products Steering Group, said: "When consumers arrive at the financial marketplace there should be simple processes and products available to allow them to make an informed and straightforward decision. I look forward to the next stage in this process."
It proposes; an easy access savings account; a 30 day notice account; a simple term life insurance product; a Simple Products accreditation body to ensure products meet core standards outlined by the group; a simple income replacement product and an accompanying kite mark badge to make products are clearly identifiable for consumers.
Marco Forato, chief marketing officer at Unum UK, said: "We welcome the review. Creating clarity and simplicity will be key to enabling consumers to make informed decisions about their protection needs."
He added that Unum research however showed communication was also a factor to consumer confusion, not just product complexity.
Hoban said: "The government is committed to putting the consumer back at the heart of the financial system, but we understand that restoring public trust in financial products is not an easy task at the moment.
"I am pleased to say that simple financial products offer a unique opportunity to demonstrate that products can both be easy to understand and meet customers' most important financial needs."
The full recommendations are open for further consultation ahead of publication of the final report in February next year.
The report has followed the group's consultations with consumer groups and industry representatives.
The steering group was tasked with devising a range of financial products which would help consumers to better engage with financial services after a government consultation in 2010.
