Discussing the FCA’s Pure Protection Review

“We’ve got 100 advisers that have completed this survey… What we’re going to be doing is consolidate those and put that into a response to the FCA around what should be the scope of the Pure Protection review.”

“The FCA wants advisers to look at overall value, not just price… They’ve reiterated that in the thematic review.”

“We’re encouraging them to look at a broader range of issues in the life insurance industry, including terminal illness cover, but there are many more issues to discuss.”

“Should all insurers have a legal duty to make information on all existing plans available to advisers electronically? This would be a huge step forward in helping advisers meet their consumer duty obligations and conduct annual reviews.”

“It’s very hard for advisers to meet their consumer duty obligations if insurers don’t make it easier to get information, particularly accurate data.”

“We had the situation earlier in the year where one insurer bought another and very quickly pulled out of a particular class of business. Should there be a mandatory notice period for insurers when they decide to withdraw products?”

“There are still distribution firms out there trying to confuse customers by talking about terminal illness cover in the same context as critical illness cover.”

“We need to get away from calling it terminal illness cover… It’s more like an advanced payment for people to get their affairs in order or treat their family while they’re still alive.”

“I suspect advisors like Gemma don’t see complaints about mis-selling terminal illness cover because their firm sells the product correctly… But some firms out there still confuse customers.”

“We’ve got to stop just focusing on price… Advisers who sell based on the cheapest product make it harder for insurers to invest in better products and claim experiences.”

“There’s a need for flexibility in products. Insurers need to make it easier for clients in vulnerable situations, especially in cases of economic abuse or family splits.”

“The race to the bottom, with life insurance sold on price alone, is damaging. We need to move towards valuing the quality of protection products more.”

“The whole awareness about economic abuse needs to be more widely shared. Insurers need to be doing everything they can to support customers in such situations.”

“I wish we’d never invented terminal illness cover… It’s a poorly described product, almost used as a cheap form of critical illness, which is not what it was designed for.”

“The declination rates we’re seeing with terminal illness reflect poorly on the industry. It’s very difficult for someone who’s told they have less than a year to live, only to be told later that insurers won’t pay out due to uncertainty.”

“It’s wrong for insurers to unilaterally pull a product when people are already in the application process… It gives the industry a very bad press.”

“We’ve seen two heartbreaking cases recently where clients missed out on terminal illness claims due to a technicality — they were diagnosed either too early or too late, and their surviving partners weren’t protected.”

“It’s a shame because terminal illness cover is supposed to give people some financial relief during their final months, but we’ve seen instances where the policy didn’t fulfill its purpose.”

“What Guardian have done with terminal illness cover is an outstanding improvement… Keen to see if other insurers will follow suit.”

“We tend not to hear when things go well, but when they go wrong, everyone knows about it. We need to work hard to improve the industry’s reputation.”

“Terminal illness cover was introduced so clients could get their money early if they were expected to die before the end of their policy term, but it’s almost becoming a hybrid between life insurance and critical illness.”

“We’re in a period where the time it takes to pay claims isn’t as good as we’d like it to be. If insurers were encouraged to report claim payment times, I think we’d see those times come down pretty quickly.”

“Life policies are designed to pay out if the client dies within the policy term. We need to be careful about extending them to cover more situations beyond that.”

“It’s already a sensitive time for these people making a claim… Then to find out they’re not ‘terminal enough’ when they’ve had the worst news of their lives leaves a bad taste.”

“Trusts are a crossover with legal advice, and handling them could put brokers in a tough spot. It’s a grey area with lots of responsibility involved.”

“Trusts and lasting power of attorney are so important, but they’re also very complex. Brokers might be putting themselves at risk if they don’t fully understand the legal ramifications.”

“We always need to be careful with the FCA because the direction they might choose may not align with what we hope. We don’t want them to create rules that limit what we can do for people.”

“When you introduce strict rules, there’s a risk that some clients might get excluded from protection advice because the regulations become too rigid.”

“I had a situation where a client wanted to remove a life assured from a joint policy after a family split, and the insurer had no mechanism to do it without rewriting the whole policy. That flexibility needs to be looked at.”

“Clients need to know what their decreasing term assurance is worth at any given time. Few insurers offer this information readily.”