LifeSearch pledge is a bid to ensure customers will receive a payout if they cannot do their own job as a result of illness
LifeSearch the adviser firm has pledged to offer the “best possible type of cover” to customers without resorting to lower levels of cover to cut the price or shorten the application process.
It is hard to disagree with LifeSearch when they described ‘own occupation’ policies as “the gold standard for income protection as the definition is considerably more likely to see real claims being paid.”
It is clear that in comparison, other policies such as ‘work tasks’ or ‘ADL’ offer less concrete definitions of a valid reason to claim. Unlike ‘own occupation where you are assessed on you inability to do your own job, the other aforementioned policies require you to be unable to perform a number of routine occupations from a set list, which is the case with work tasks and Activities based definitions could be as simple as holding a pen in either hand.
You only have to look at our founder, Chris’s case back in 2009. Hospitalized for three months. Critically ill and bed-bound. Admitted to hospital on many occasions in an emergency situation after finally being discharged. You would imagine his claim with Scottish Provident would have been straightforward due to the seriousness of my illness.
It took three attempts via the Financial Ombudsman Service to get Scottish Provident to finally agree to pay Chris’s claim, but only after taking the case the financial ombudsman service three times. Chris still gets annoyed now in 2015, because of the affect it had on Chris and his wife Nicola.
The guarantee by LifeSearch has also been launched at the same time as the company released a new infographic to help consumer better understand income protection.
Tom Baigrie, CEO of LifeSearch, said: “Our advisers have always sought to recommend the most comprehensive solutions and the guarantee doesn’t change our advice process, but sometimes consumers are unwittingly seduced by inferior products with a lower cost. So we promise that as long as you are working, we will only recommend an income protection policy that will pay out if you’re unable to do your own job.
“People need to know that products vary but that their salary is properly protected with the right cover. On average more than 90% of all IP claims are paid in the UK, however the public perception is that that number much lower. This campaign aims to highlight the different types of cover as well as improving consumer trust in protection.”
This decision this week by LifeSearch is welcomed and follows the high profile campaign by Chris to get UK insurers to scrap ‘work tasks’ and ADL definitions.
Chris Hargreaves, consumer campaigner and founder of angrypolicyholders.com said on the news: “It is good to see advisers seeing sense and avoiding selling products which without doubt have a negative affect on claims.
“As long as insurers continue to sell policies which are not for for purpose, consumers will always have a negative opinion of insurers.
“Claims statistics are starting to increase since insurers such as Aviva, moved toward ‘own occupation’ only policies and this can only help the misconceptions consumers have towards these types of policies. It is also good to see initiatives like Seven Families which is trying to show the positive side of protection insurance, specifically income protection.
Chris continued: “I have always disagreed with the theory that its better to sell any policy than none at all, but it does raise the question as to what LifeSearch will do if an occupation does not meet the criteria for ‘own occupation’ cover”.
Independent Adviser Allan Smith told angrypolicyholders.com: ” In the event a LifeSearch policyholder cannot be offered ‘own occupation’by an adviser I have concerns as to what policy will be offered.
Mr Smith continued: “As an IFA I am not entirely sure whether “any occupation” income protection should be continued to be offered in 2015.”