Government green paper a ‘game changer’ for protection
Scottish Widows’ financial protection specialist Johnny Timpson has called the government’s ‘Work, Health and Disability’ green paper a “game changer” for the protection industry.
The report published this week focuses on boosting the uptake of group income protection, though the government is also consulting with the industry on closing the protection gap for individuals.
A Department for Work and Pensions (DWP) representative met with the Income Protection Taskforce trade body this week to discuss how the industry can help.
The government’s primary focus is said to be safeguarding those with mortgages.
Timpson (pictured) said: “This is a game changer: This DWP green paper is going to bring change to the shape of workplace and individual solutions and it is welcome.
“We now have a debate between the government, health insurers and health industries.
“The DWP is keen to get out and talk to advisers and their mortgage clients.”
The government is seeking views on the report, with the consultation closing on 17 February 2017.
The green paper suggested the insurance industry needs to develop more affordable group income protection policies for small firms.
Timpson wants the industry to look at combined protection and critical illness products to make things simpler for consumers.
He also reckons the industry needs to alter the language it uses, as the term ‘income protection’ is often seen as too ambiguous and is mistaken for the much-maligned ‘payment protection insurance’.
Timpson added: “We need to take a hard look at the current design of the advice process and product solutions.
“Maybe there’s a role for having a quasi-protection and critical illness product.
“We’re already touching on it with iPipeline’s Solution Builder, IRESS, LifeQuote – they all allow you to offer multi-benefit quotes.”
And he said: “We need product simplification and simplification of the language we use.
“Equally key is having some form of annual review from advisers where customers have a quick health check regarding both their mortgage and protection solutions.”
Timpson thinks the priority should be putting clients in an informed position so they understand how much support the state will give them if they are unable to work due to a health, sickness or disability issue.
According to Timpson a phrase that will be rolled out by the government from now on is ‘Work is a health outcome’, as the priority is keeping people in work and getting them engaged.