Lifestyle insurance sounds like a positive, affirming financial product. It sounds aspirational.
For a specified premium, you can insure your clients’ lifestyle: their income, their home, their luxuries, the things they enjoy.
As a marketing phrase, this seems to work so much better than ‘income protection’, because it speaks to the fundamental desire of each person: we love the lifestyle we have, and we want to keep and improve it.
But is it more than a new badge on an old product - and is there more to the growing popularity of short-term income protection plans than just branding?
Alan Lakey, founder of the CI Expert, thinks this might be one marketing phrase too many: “As often happens, the insurance industry has got itself into a mess due to the payment protection insurance (PPI) scandal, and the plethora of names accorded to the various protection plans.
“Part of the problem is the use of acronyms, which tend to appear similar, and fail to indicate what the protection actually is.”
He cites: "PPI, MPPI IP, ASU - all these acronyms are in use and industry insiders know what they mean, yet the consumer neither knows nor cares. They simply want sick pay, mortgage payment insurance, unemployment insurance, and so on.
“Lifestyle insurance is another instance of a descriptive that suggests comprehensive coverage, yet may only provide income when ill or redundant.
“It is a variation on the existing mortgage protection payment insurance plans, which can provide limited income protection and limited redundancy protection."
Paul Reed, co-founder of Cardiff-based advisory firm Vita, agrees: “The key thing is no matter the badge on the product, the consumer has to be number one and they have to be aware of what they are getting.
“Without advice, it is almost impossible for a consumer to understand the differences between ASU (accident, sickness and unemployment) or PPI or income protection. Different providers come out with new names for all sorts of products, but the customer needs to be able to make a proper decision based on clear features, clearly explained.”
This doesn’t sound like a ringing endorsement.
But others believe it is more than a marketing ploy. According to Peter Hamilton, head of retail propositions for Zurich, it is “gaining traction” as a product because of its flexibility and appeal for younger, and perhaps lower, earners.
He explains: “This new type of shorter-term income protection, with benefits payable from, say two to five years, is gaining traction for a number of reasons.
“It is cheaper, it allows enough time for most people to get back on their feet or make alternative arrangements, it is simpler and easier to understand, and can be linked more closely to expenditure rather than to definitions of salary.”