An energy services provider offering income protection without advice has drawn the attention of protection advisers for its sales practices.
Posting on LinkedIn yesterday (3 August), Umbrella Protect managing director Anna Glod, highlighted a fixed energy deal offer from Utility Warehouse that included sales personnel pushing income protection within the package.
Described as a multiservice energy provider, a model also known as multi-level marketing, Utility Warehouse operates as the brand name of parent company, Telecom Plus, and offers a services portfolio covering energy, mobile and broadband, and home insurance.
Glod stated that she looked into Utility Warehouse's 'best on the market fixed energy deal' only to find that applicants were forced into also taking four other products to quality - broadband, a mobile SIM, contents insurance and its income protection product, Income Protector.
"As you can imagine, I was especially interested in looking into the details of this Income Protector (how they call it) product," Glod wrote in her post.
"The sales rep didn't even know who the insurer was and couldn't explain the policy details to me, but she was trying to talk me into buying it."
According to the Utility Warehouse website, its income protection product offers a pay out of up to £750 per month across a six-month claim period after 30 days of inability to work due or unemployment, with a total accidental death pay out of £10,000.
The premium is listed at £16 per month for cover, although Glod's research found that premiums could also cost £18 per month, a cost that she said could be beaten by other insurers including a 12-month claim period.
Glod wrote that the pricing element wasn't the most shocking part for her compared to how the product, and overall deal it was included within, was being advertised on social media.
"Nothing is mentioned about having to buy four additional services, nothing is explained about the insurance products: contents or Income protection during the sales call," Glod detailed.
"They were trying to sell an Income Protection policy to me without even checking what my occupation, earnings, or health was."
Non-advised protection sales is a contentious topic across the industry with many advisers and intermediaries vocalising their dissatisfaction with the practice and its negative impact on consumers.
In April, LifeSearch chair Tom Baigrie spoke to COVER about his work to increase transparency in the life cover space by requesting that insurers disclose greater levels of data into their non-advised sales channels in the name of building consumer trust.
However, due to the often complex nature of income protection, it is viewed as a product that specifically requires qualified financial advice in order for consumers to obtain the right breadth and depth of cover.
"Income protection forms part of protection advice and part of regulated financial advice.
I believe every consumer deserves proper financial advice," Glod stated.
"Consumers should not be forced into buying regulated products as part of their energy deal package without proper advice and explanation. This needs to stop!"
COVER has approached Utility Warehouse for comment.