We welcome new products that aim to reach more customers.
So while the Scottish Widows Plan and Protect range has been designed for in-branch advisers and it is not yet known if it will become available to intermediaries, we very much see this as a positive addition to the choice customers have – albeit to be eligible they need a mortgage with Lloyds Banking Group.
Level and decreasing term insurance are both on offer, along with critical illness, which can also be standalone. Cover is available from the age of 18 up to the age of 60 and available until 70.
Plan and Protect has just seven underwriting questions and it is clear to see how this may bolt on to a mortgage application.
It is a similar proposition to other simple products we have seen in the market with a short question set, capped sum assured and reduced number of conditions covered, but this time a few more conditions are included than most simple products tend to have.
What I particularly like is its easy-to-understand wording – something we need to see far more of across the adviser market.
It is transparent and, as we all know, there is often much complexity when arranging a mortgage. To then add the complexity of insurance ‘speak’ can be too much and interest is lost.
The plan has to be applauded here and Scottish Widows has said this is the first step in its journey to transform the protection market, so it will be interesting to see what follows.
It is a truly simplified critical illness policy, so while not covering all conditions, the 24 conditions covered are very representative.
However, the flip side is that with being a reduced question set, will there be higher decline rates? And could that give the wrong impression?
If so, it is important customers understand that being declined for Plan and Protect may not mean being declined or even rated with another provider. In the past this has not always been made clear for those providers with simplified products and, therefore, simpler underwriting, because underwriting can impact both product and insurer selection.
Also, with cover needing to end at 70, there could be a number of customers whose mortgage could take them past 70, which could represent an issue.
There is certainly a place for more products like this, especially at the point in a customer’s life when they need to be thinking about protection, such as a new mortgage, which is one of the biggest.
Emma Walker is chief marketing officer at Lifesearch