Maybe, just maybe, the penny is beginning to drop about the financial virtue of securing protection insurance.
The sales figures collated by the bean counters at the Association of British Insurers are both woefully out of date – the latest available are for the third quarter of 2014 – and inconclusive (sagging income protection sales, strongish critical illness sales), and they do not tell the full story.
I could be wrong (I often am), but I get the impression that people’s perception of protection insurance is slowly changing. This insurance is no longer viewed as a ‘product’ that demands expensive premiums but regularly fails people when they call upon it in their hour of need.
How far perceptions have changed struck home last week when I stumbled upon an online video on protection insurance recently produced by The Independent newspaper.
I accept that the video, starring personal finance wizard Simon Read and protection insurance guru Louise Colley of Aviva may not necessarily be everyone’s cup of tea (some like their video content to be a little stronger). But probing Read and feisty Colley made a good job of explaining the nuts and bolts of protection insurance. I persevered until the end – although I did take time out halfway through to indulge myself in a cup of hot chocolate and a jammy dodger.
Of course video content is now a key component of online personal finance commentary, but I would hazard a guess that 10 years ago this video would have been consigned to the cutting room floor.
Back then, no personal finance journalist with an ounce of integrity (Read has kilos of it) would have put their name to a video extolling the virtues of protection insurance – because virtue was in short supply. Claims were routinely declined on spurious grounds, and accidental non-disclosure was used as a weapon against claimants, while insurance companies remained tight-lipped over the percentage of claims they rejected.
Today’s protection insurance world is a far better one. Rules now govern how medical non-disclosure is treated by insurers, while product providers routinely publish claims statistics highlighting the fact that they meet more than 90 per cent of claims. Nirvana.
Against this improved backdrop, it is great news that there are professional people out there who now want to push on and convince the wider public that financial protection from ill health should be a key component of their personal finance armoury.
Nothing embodies this new-found determination more than the Seven Families Campaign – launched last year to raise awareness of the often devastating financial impact of long-term illness or disability.
Now backed by 20 companies (primarily insurers) and charity Disability Rights UK, Seven Families is helping seven families get back on track after suffering financial turmoil as a result of the main breadwinner being forced out of work by an accident or long-term illness. Details of the fourth family to benefit from this campaign, the Thornleys from Aberdeenshire, have just been announced.