Consumers do not trust insurers to pay out on income protection (IP) claims, according to Defaqto's ...
Consumers do not trust insurers to pay out on income protection (IP) claims, according to Defaqto's latest IP report.
The research firm's annual report also showed insurers lack trust in consumers, with underwriters believing people prefer being ill than going to work.
Nick Telfer, head of life and protection at Defaqto and author of the report, said: "Consumers have always held insurers in low regard. The concern is if it gets negatively worse".
The report suggested IP does not sell due to issues including lack of motivation, trust, cost issues, and people being unaware of their need for cover.
In 2005, over 1.5 million people took out disability insurance policies. However, only 10% of those chose IP.
The report argued several areas of IP could be revised.
Telfer added: "Standardisation is key. No insurers have tried to break the mould yet." He argued lessons could be learned from the critical illness market with developments like the Virgin and Prudential products. Telfer concluded: "Perhaps a similar concept of products could be developed."
