The two have historically been interlinked but in 2009 gross mortgage lending fell from £362,632 million in 2007 to £143,506 million. Mortgage-related critical illness sales fell by 19.5% but total critical illness sales by only 4.7%.
Ben Heffer, insight analyst at Defaqto and author of the new guide, said: “Protection policies are ‘sold’ not ‘bought’ and protection advisers have simply had to work harder for their sales. Advisers have had to increase their sales efforts to counter the difficult conditions caused by the recession and householders’ desire to rein in spending.
“As the UK emerges from recession, protection advice remains as important as ever but critical illness is a complicated product and advisers have to work harder to communicate the positives – the long term value and benefits, the improving claims statistics and the new product innovations such as the provision of health and wellbeing services.
“We are also seeing new phenomenon – such as ‘condition inflation’ which has resulted in an increasing numbers of critical illnesses being added to policies, over and above those conditions responsible for the vast majority of claims. This does add further complexity but advisers should not overlook that the policy with the greatest number of conditions may not really represent the best value for their client. The value of a critical illness policy is invested in the quality of the definitions and not simply in the number of conditions covered.”