Confusion over the clarity of mortgage payment protection insurance (MPPI) products continues this m...
Confusion over the clarity of mortgage payment protection insurance (MPPI) products continues this month following the Financial Services Authority's paper stating that the product is in fact meeting the regulator's compliance rules.
How these policies are sold was criticised however, which once again calls into question the advice being given in the market and highlights the confusion among consumers regarding the different types of protection products on the market.
This latest development will no doubt reignite the debate over whether income protection (IP) is a more suitable product than MPPI in most cases, although misgivings are beginning to be raised about whether the discussion is actually focusing on the point.
While most providers attribute the relative popularity of MPPI to the simplicity of the product, perhaps the real issue involves the imagination of the purchaser. While consumers can imagine having to take a few months off work for a hip replacement, contemplating the possibility that you may be disabled for the rest of your life and never be able to work again is an idea that few people dare to entertain.
If the elysian day when IP finally claims its rightful place at the summit of the protection market is ever to arrive, intermediaries will have to start ramming home the message that tragedies will come to pass and that sticking your head in the sand is no protection from misfortune. That may sound simple but in reality IFAs will have their work cut out.
Angela Faherty, editor
