Let us be honest. Financial protection insurance is not a particularly sexy sell.
Speaking to many financial advisers, as I do on a regular basis, I get the distinct impression that on any given day they would rather be managing a client’s wealth on an online platform than arranging insurance cover for them.
In fact they would rather do anything – filling in yet more forms for the Financial Conduct Authority – than set up financial protection cover, which can often be time consuming and sometimes messy to arrange.
Of course, there are some such as Alan Lakey, director at Highclere Financial Services (and CIExpert), that thrive on it and have made a successful career from it.
Mr Lakey eats, sleeps and breathes financial protection; a living insurance encyclopaedia if ever there was one.
I have yet to catch him out on an illness and whether it is covered or not by an insurance policy. I fear I never will. He is the insurance industry’s answer to Thunderbirds’ Brains.
Not far behind are Roger Edwards, marketing director at Protection Review; Johnny Timpson, financial protection specialist at Scottish Widows; and the marvellous crew that make up LifeSearch – a company that modestly bills itself as the country’s leading insurance provider. Drewberry and London & Country also do their bit to fly the protection insurance flag.
But these are the exceptions and not the norm. Most financial planners prefer to help clients build wealth rather than defend it. And even when in client defensive mode, it is usually more about protecting wealth from the taxman – now or beyond the grave.
There are also a whole array of other distracting issues to keep advisers away from protection – pension freedoms looming larger than most.
Yet, maybe, just maybe, the tide is beginning to turn a little. Although up-to-date statistics are desperately hard to find, sales of term assurance, whole of life, critical illness and income protection policies appear to be moving in the right direction, albeit from a low base.
According to Swiss Re’s definitive Term and Health Watch report issued last May, almost 2m financial protection policies were sold in 2017 – an increase of nearly 12 per cent on the year before.
Encouragingly, CI sales were up a fifth. Greater ‘customer-centricity’, more choice and greater product flexibility were all contributory factors.
It will be interesting to see what Swiss Re reveals about the market when it publishes its 2018 report in the spring.
Given there is greater economic uncertainty in the air, you would think that more households would be minded to ensure they have protections in place if something upsets the apple cart.