The Income Protection Definition Debate

OshayAway

AngryPolicyholder wrote: »

OshayAway is it down to profits rather than looking after policyholders?

It's down to clarity and understanding.

dunstonh

Ok responding to dunstonh I'm sorry but my facts are 100% correct and this is a major issue within the industry. Below are just a few quotes from the 15 or so articles wrote about me in the national press:-

You said income protection should be banned and indicated IFA mis-selling. The articles make reference to task based plans and no indication of IFA mis-selling.

AngryPolicyholder

Sorry its hard to do links via my mobile. In the FT article Scot Prov blamed the misselling of these policies for all the problems. If you stick an s on the end of our user name and search Facebook you will find our page and all the press articles are on there.

dunstonh

AngryPolicyholder wrote: »

Sorry its hard to do links via my mobile. In the FT article Scot Prov blamed the misselling of these policies for all the problems. If you stick an s on the end of our user name and search Facebook you will find our page and all the press articles are on there.

That doesnt make it IFAs at fault. FAs in particular are prone to having only task based plans or any occupation plans available to them.

I'm not sure that Scot Prov is a reliable indicator. They may have issues that are down to their claims processing being too aggressive or, as has happened with some providers, poor quality application forms that dont ask the questions well enough. I would want to see other providers reporting issues and there just isnt any coverage in the financial press to indicate any issue.

The small volume of complaints at the FOS doesnt indicate a widespread issue. I would expect larger volumes and larger FOS upholds and that isnt happening.

I just looked up the claims stats for income protection on the Cirencester Friendly and their last published figures showed the paid out on 94% of claims. The 6% of claims not paid out on the follwing reasons.
1 - proof of earnings could not be supplied (sounds like dodgy claimers)
2 - medical evidence could not be supplied (strange one)
3 - no loss of earnings (legislative issue)
4 - non disclosure (refusal of payout normally means intentional non-disclosure by consumer)
5 - contract in arrears (i.e. they stopped paying premiums but then suffered a claimable event and tried to claim)
6 - the claim was submitted too late

The 94% of claims were valid and paid to the value of £2.7 million. Not bad for a small provider. However, this sort of pay out rate is typical.

starrystarry

AngryPolicyholder wrote: »

All I'm asking for and I'm supported by the industry for these policies to be banned and replaced with own occupation.

If insurers are forced into a position when they can only offer "own occupation" policies they'll simply decline a lot more applicants. There are a lot of occupations that I wouldn't consider offering "own" on, at any price.

AngryPolicyholder

The press is full of stories. Check out the following

Ftadviser
MoneyMarketing
Cover Magazine
The Times
MoneySuperMarket
ME Association
Hi-Mag
The Chauffeur Magazine
The National Private & Taxi Monthly Magazine

These are just a few of the publications they have covered this case and these definitions.

Also search FB for angrypolicyholders

I would put the full links but I don't think you are allowed.

kingstreet

More on AP's story here;-

http://www.ftadviser.com/2012/05/09/opinion/jeff-prestridge/protection-victory-makes-chauffeur-owner-people-s-champion-6i3ZD90XclUuCmlliJOCBM/article-0.html

I wish it had been explained how the "work tasks" definition had been used. It's not clear if the adviser used work tasks in an effort to reduce his client's potential premium, or if work tasks was the only definition ScotProv would offer?

If the latter, we then have to ask why ScotProv? Why not another provider who would offer "own occupation?"

ACG

If it changes all providers to offer own occ - it could be a good thing on one hand but affordability wise could be a bad thing. It would be good to see insurers offer both options.