This Consumer Charter is, in our opinion, a document that the industry has needed for some time.
This is not only because of the exceptional fallout from the PPI debacle, which still continues as claims management companies seek to right wrongs that haven’t even occurred. And it is not just because there is a lot of confusion about the difference between the various categories of product and their claims disclosure rates.
It is simply because Income Protection is a product that matters not just to the relatively small number that have hitherto bought it, but potentially to many millions of people who need real certainty about the terms and the quality of cover that providers are offering.
We hope and believe that adherence to this Charter will do much to reassure advisers, the media and, most importantly, potential customers that Income Protection is a non-toxic product that can be bought safely and with concerns allayed.
The Charter is a major statement on behalf of the industry that we believe will promote confidence and greater trust between providers and the public.
THE INCOME PROTECTION CHARTER
If you think you might need protection cover, you can expect that IP Providers will:
• … help as many customers as they can by emphasising the importance of income protection to most households — this will ensure customers get an opportunity to buy essential cover
• … engage with DWP and employer organisations to produce annual sick pay statements so that the public understand their state entitlements and their employers’ sick pay provisions — this will highlight customers’ potential financial vulnerability in the event of extended sickness
• … commit to increasing adviser knowledge of income protection by helping to make this part of an enhanced protection qualification for advisers and mortgage advisers — this will ensure that the general level of understanding of IP among advisers is increased
• … make clear the differences between Income Protection products and PPI — ensuring that customers can buy Income Protection knowing that it is a non-toxic product
• … work with Government to minimise the risk that people eligible for means-tested benefits are disadvantaged in any way by having IP cover — this will relieve concerns that taking IP cover might disqualify customers from benefits they are entitled to
If you buy an income protection policy you can expect that IP Providers will:
• … ensure customers understand the cover they are purchasing by employing policy wordings that are concise, unambiguous and written in Plain English — this will ensure customers understand exactly what they are and aren’t covered for
• … simplify cover offered to customers by offering ‘own occupation’ disability as the definition of choice where possible and discouraging the use of task-related definitions unless it is the only way of providing cover — this will ensure that the vast majority of customers get the most comprehensive coverage available
• … acknowledge all communications from customers within five working days and commence prompt due payment of all clearly valid IP claims within four weeks of receipt of the claim — this will prevent customers from suffering financial hardship as a result of administrative delays during the claim process
• … identify and eliminate unnecessary complexity and bureaucracy in underwriting, claims and administrative practices — this will speed up and improve service to customers
• … publish an annual statement disclosing the percentage of IP claims paid — this will give customers confidence that the policy will pay out when needed