The Association of British Insurers is aiming to raise awareness of income protection by consulting on a new consumer guide and revisions to its current statement of best practice.
The consultation will involve the FSA, Office of Fair Trading, the Financial Ombudsman Service and the Consumers' Association. The new consumer guide and statement of best practice will come into force by the end of May. The deadline for responses is January 31.
The consumer guide explains the different types of health insurance products on offer. These include income protection, critical illness, private medical and long-term care insurance.
The statement is designed to ensure income protection providers adopt a clear and consistent approach in explaining and defining key features and terms of their income protection products.
It includes a key features document to ensure products are described in a way that allows consumers to compare the range of income protection cover offered by different insurers. The new statement will include new guidance on the definition of incapacity and linked claims.
Richard Walsh, head of health insurance at the ABI, says: “In the past many people have underestimated or been unaware of the severe financial impact which a prolonged period of work could have.
“Yet, with over 2.7 million people in 2002 receiving state invalidity benefits due to illness or incapacity, awareness of the value of income protection insurance is vital if we are to tackle the gap between the number of people insured and the size of the working population.
“This new consumer guide and revised statement of best practice will further increase consumer understanding of the need to protect themselves and their families against the financial strain which a lengthy period out of work can bring.”