View more on these topics

Defaqto study highlights IPI failings

A new study by Defaqto claims that income protection insurance policies could breach the principles of the Financial Service Authority’s Treating Customers Fairly initiative.

In its first report into UK long-term IPI products, Defaqto cites the consumer detriment caused by the complexities and inconsistencies in policy terms and conditions as providers seek competitive advantage rather than consumer benefit.

One such example is the fact there are 13 different methodologies used by providers for the calculation of the maximum insurable percentage of salary. The complexity surrounding these rules means that the likelihood of setting a realistic level of benefit is remote, undermining faith in the product. Also, there is generally no contingency to refund overpaid premiums.

Among issues highlighted in the report are the dangers of diluting the IPI proposition in an attempt to take market share from mortgage payment protection insurance providers and the difficulties advisers face in recommending reviewable premium rates. The review terms across the market are far from consistent with as many as six different approaches being taken by providers.

Also explored are the reasons behind why income protection sales are failing to get anywhere close to their potential and why they are losing out to critical illness.

Nick Telfer, head of life and protection at Defaqto, says: “I believe that income protection should be the most important item on anyone’s protection shopping list but, as highlighted in the report, the industry will need to change significantly before consumers and advisers warm to these products and I do not see any evidence of this at the moment.”


Cricket tops football in the property stakes

Propertyfinder.coms latest survey of estate agents reveals that properties near football grounds are less popular with home buyers, while those near tennis and cricket grounds attract premium valuations.Famous cricket grounds are estimated to add 3.3% to property prices nearby. While a property close to Lords in London could be worth 2.8%, or 14,500 above the […]

Leeds Building Society launches two fixed rate mortgages

The latest figures from The Council of Mortgage Lenders show that fixed rate mortgages accounted for 54% of all loans in August, which is the highest proportion ever since monthly records began in 1998. With this in mind, Leeds Building Society has launched a new two year fixed rate mortgage from only 4.75% and a […]

Keogh joins FSPP Practitioner Panel

The Financial Services Authority has appointed Colin Keogh, group chief executive of Close Brothers Group – owner of Mortgage Intelligence – to the Financial Services Practitioner Panel. The FSPP is a statutory body that represents the interests of practitioners within the regulatory framework, principally by ensuring that the FSA takes account of the views and […]

Increase in ARs not expected

Attendees to the Mortgage Business Expo dont believe there will be an increase in advisers giving up their directly authorised status.When asked whether they expected to see more advisers moving from directly authorised to appointed representative status over 58% of registered Expo attendees say no.Over 3,250 registered Expo attendees were polled, of those 1,356 say […]

A guide to auction finance in 2017

By Matt Tooth, chief commercial officer, LendInvest Over the coming weeks, property auction houses across the country will begin sending out their catalogues to prospective buyers in time for the first auction series of 2017. It’s an exciting time for investors, well aware of the opportunities the properties on the lot sheets offer them and […]


News and expert analysis straight to your inbox

Sign up