Conversely, you could argue that uncertainty causes households to batten down the hatches and spend less, even if that spending reduction results in a protection policy rather than a gym membership being abandoned.
In recent weeks, two developments in the financial protection market have particularly caught my eye. The first relates to the soft launch of a protection calculator by none other than the Association of British Insurers, a trade body not renowned for its consumer-facing work.
The idea of ‘Percy’ – please do not ask why it is called this – is to give people an idea of the income drop they would experience if they were unable to work due to long-term illness or serious injury.
In other words, it is a shock tactic, aimed at encouraging people either to save more or to consider IP insurance. To become more financially resilient.
It is effective. I put some numbers into Percy and I nearly had a heart attack.
I am not sure that would be in the best interest of the insurance industry (more claims to pay) – and the ABI has said Percy needs some refining in the months ahead – but at least it will get users thinking.
Give it a go at https://www.abi.org.uk/percy/ – the association has said that no data input will be stored. Maybe take a paracetamol beforehand.
The other significant development is Scottish Widows’ launch of three ‘plan and protect’ plans that will be available through the shrinking number of Halifax and Lloyds branches.
Simple plans backed by an undaunting brochure and a truncated key facts document – and very much aimed at the mortgage market: life only, life and CI cover, and CI only.
As you would expect, Scottish Widows says the products are the “first step” in its journey “to transform the protection market”.
Of course, banks have a horrible record when it comes to selling financial products – mis-selling comes to mind – but Mr Lakey (AKA Mr Protection) believes this new product range could be a win-win-win.
A win for Lloyds and Halifax customers, a win for the bank and a boost to the protection market as more people are encouraged to step on the protection insurance ladder.
Let us hope Mr Lakey is right. Would it not be lovely if for once a bank sparked something good?
A booming protection market; a horrible protection insurance black hole no more.
Jeff Prestridge is personal finance editor of the Mail on Sunday