The Income Protection Task Force (IPTF) launches ‘Seven Families’, aiming to show consumers the benefits income protection (IP) when you can’t work
Over the past few years Angry Policyholders has campaigned hard against useless income protection policies. As I know from personal experience a bad policy not only leaves the policyholder with a refused claim in their hour of need, but also brings the UK insurance industry’s reputation into question.
Thanks to the support we got from industry experts, insurers, the press and media the dreaded activities of daily living definitions (ADL) were scrapped, with all major insurers moving to the far superior own occupation definition. This move dramatically increased the number of occupations which would qualify for own occupation including crucially manual labour occupations.
This move significantly improved the chances of payout for policyholders, from around 50 per cent (ADL) to between 88 to 100 per cent (own occupation). Even though this move was very positive for both consumers and the insurance industry the problem still remained trying to convince consumers to buy into income protection.
With sales lagging behind other protection insurance policies, such as critical illness and life insurance, the Income Protection Task Force has come up with a plan to help improve sales and change consumers’ perception of income protection insurance.
IPTFs’ Seven Families, will work in partnership with Disability Rights UK, helping to find seven families where the main breadwinner is unable to work because of sickness or accident severe enough to keep them off work.
For the seven families to qualify the main breadwinner would have had an income of between £30-35,000 before they were unable to work and not already have IP. Today’s launch saw Peter le Beau, chairman of the IPTF, say: “This project is not in any way to criticise the Government’s approach to welfare or to make a grand political statement, it is just intended to show a situation people need to know about and that hardly anyone does.
“I have talked in principle to companies for some time about providing the funding for such a scheme…but we will shortly be sending contracts to the companies who have indicated an interest in participating, we will be showing what we ask the families to sign and will outline how we will run this project.
“In return we will be asking the companies to fund the project for a year. The cost will be £20,000 maximum.”
So far insurers believed to be financially backing Seven Families include; British Friendly, PruProtect, Zurich, Scottish Widows, LV=, Ellipse, Friends Life, Unum and Aviva.
Disabilitiy Rights UK’s role will be to initially recruit the seven families, to administer the all the project funding and to offer ongoing support. Disability Rights UK, an umbrella body, has 302 organisational members from charities to citizen’s advice bureaux to Government departments.
Jason Jaspal, disability manager at Disability rights UK, added: “We see a direct link between disability and hardship every day. The Seven Families initiative gives us the opportunity to raise awareness and draw attention to the lack of resources and consequences individuals and their families can face.”
Commenting on the plan Louise Colley, protection director at Aviva, said: “We believe every family deserves to understand the risks it faces today. This initiative will support this because the ignorance of the lack of support is astounding.”
Today is the launch of Seven Families which means it’s too early to decide if this will be a success, but we will follow this with interest. On the face of it we definitely support the principle of Seven Families because anything that improves awareness of IP can only applauded.