CIExpert has launched a campaign calling on the protection industry to encourage the recommendation of individual protection plans as the preferred option for couples.
CIExpert believes joint life first event protection plans to be “largely obsolete” in today’s world, delivering “inferior consumer outcomes and lower levels of fair value”.
Instead, CIExpert argued that a consumer duty-based compliance process should default to recommending two single plans for couples and that advisers should justify any recommendations of joint policies.
This belief has inspired CIExpert to begin the 'Single is Best' campaign, which has already received backing from industry leaders such as Johnny Timpson; Ruth Gilbert, Insuring Change partner; and SimplyBiz head of protection and health solutions, Emma Vaughn.
CIExpert director, Alan Lakey, said: “We strongly believe an industry shift is needed to prevent consumers from holding suboptimal policies for marginal savings.
“There are very few instances where joint life plans can deliver a better customer outcome than two individual plans.
“A consumer duty-based compliance process should default to recommending two single plans for couples, and advisers should be required to justify any recommendation of joint policies, clearly outlining the benefits that clients may forgo with this ‘cheaper’ option.
“It's clear that whether intended or not many compliance processes put the emphasis on explaining why the cheaper option is not being recommended and becomes an additional hurdle for advisers."
As part of the campaign, CIExpert has created a report to raise awareness of the benefits that two single policies offer; to make the case that they represent greater value, more flexibility, and better quality of protection.
The report addresses the common objection that a joint policy can be cheaper, with data supplied from Iress analysing over 300,000 quotes illustrating how the cost difference is “marginal” and outweighed by the benefits.
In contrast to this evidence, CIExpert’s Critical Thinking Report found that 43 per cent of consumers assumed a joint policy would be the best option for them if they took CIC, while a further 33 per cent were unsure.
CIExpert also said it was “concerning” that data from Iress showed 25 per cent of advisers quotes in their process are for joint policies.
Additionally, St James’s Place divisional director development and technical consultancy, Tony Mudd, said: “I totally support CIExpert’s ’Single is Best’ campaign and pledge.
“While there are few absolutes in life and almost always exceptions such that going with ’single is always best’ could invite, may I say pedantic criticism, singles over joint should at the very least be the default position.
“So congratulations to the CIExpert Team for producing such a compelling document evidencing all the reasons why individual plans deliver a quality based consumer outcome focussed comprehensive protection portfolios for both individuals and modern families.”
tom.dunstan@ft.com
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