The Task Force has written to the Competition Commission in the wake of its recent paper on PPI.
Its main complaint is that PPI offers poor value for money to customers, give a misleading impression of the scope and duration of the protection they offer and generates a large proportion of cases for which claims are declined.
The letter to the CC says: “We feel the proliferation of these products has impeded customers from gaining access to alternative long term products which offer much greater value for money and which would be significantly better suited to their needs.”
But it says there are many benefits of long term income protection.
* Duration of cover and benefit payment period designed to match the full term of the mortgage. We believe that it is vitally important to match the benefit payment period to the client’s specific need and that this should be addressed as an issue before clients look at any price comparison tables.
* Full coverage of all types of sickness or disability which have the potential to cause long-term inability to work.
* Being within the scope of products covered by FSA regulations regarding sales practices for long-term insurance business.
* The possibility of claiming on several occasions, without losing cover or having the premium adjusted, if disability recurs.
Clive Waller, co-chairman of the Task Force, says: ”We wanted to engage in a constructive dialogue with the CC which was not ‘a PPI-bashing session’ but rather an illustration of why we believe Income protection is a more appropriate solution to covering people’s financial commitments in the event of long-term disability.
“This is a very important issue which people need to address.”