“We believe the industry should reconsider its approach by requiring justification for recommending joint policies over two single policies, as individual policies typically offer superior protection and greater flexibility.”
CAMPAIGN
Join our campaign to urge the industry to prioritise individual plans for superior consumer outcomes
Our recent Critical Thinking research has uncovered a myriad of issues surrounding consumer awareness and understanding, as well as prevalent misconceptions among advisers. The ensuing discussions within the industry have been both eye-opening and encouraging.
One particular issue demands urgent attention due to its significant impact on consumers: the widespread misconception around joint policies for Critical Illness Cover (CIC). This issue runs contrary to the Consumer Duty principles our industry strives to uphold.
Findings from the Critical Thinking Report
This issue appears to stem from compliance procedures that require advisers to justify why they didn’t recommend the cheapest option, whether intentional or not, this results in clients receiving suboptimal advice.
Data supplied by Iress shows that joint CIC policies are only marginally cheaper than two single policies. While this small cost-saving may seem appealing, two single policies offer greater value, flexibility, and quality of protection in today’s Consumer Duty-driven environment.
Read our campaign document
In our campaign document we summarise the key points from our research findings and provide a detailed appendix for those seeking the in-depth reasoning for this campaign. Click below to read it:
Together we can make a real impact on customer outcomes.
Click below to pledge your support!
Campaign gains momentum
CIExpert was inspired to launch this campaign to encourage leading distribution firms, advisers, providers, and other industry influencers to join the movement. It already has backing from industry leaders.
Alan Lakey, Director & Founder
“We strongly believe an industry shift is needed to prevent consumers from holding suboptimal policies for marginal savings. There are very few instances where Joint Life plans can deliver a better customer outcome than two individual plans. A Consumer Duty-based compliance process should default to recommending two single plans for couples, and advisers should be required to justify any recommendation of joint policies, clearly outlining the benefits that clients may forgo with this “cheaper” option.
It's clear that whether intended or not many compliance processes put the emphasis on explaining why the cheaper option is not being recommended and becomes an additional hurdle for advisers. Last year, in a meeting with FOS, this was one of the examples that we shared with them to test their view. They were clear that they did not favour cost over value as long as the suitability letter reflected the clients being given a choice and confirmation that a discussion took place and the client’s were agreeable to single life plans.
We have already received support from key figures in the industry and we now want to reach further and ask more advisers, firms and networks to sign up to our “Single is Best” pledge. This is something that advisers can support to drive real change. By adding their name they will join a growing number of advisers who believe that individual Life & CIC policies should be the default choice for couples.”
Time for change
CIExpert believes Joint Life First Event protection plans to be largely obsolete in today’s world, delivering inferior consumer outcomes and lower levels of fair value. It believes that a Consumer Duty-based compliance process should default to recommending two single plans for couples and that advisers should be required to justify any recommendation of joint policies, clearly outlining the benefits that clients may forgo with this “cheaper” option.
A "Consumer Duty" fair value assessment would likely challenge the merit of selling a joint policy. Read our document for the key reasons why two single policies are superior:
