Credit Crunch Hits Income Protection Insurance

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Article published on 24th May 2008

Sales of Income Protection Policies (IPPs) have fallen drastically in last few years, according to new figures released by Swiss Re.

The reports, available through the links above, show that the total sales of IPPs in 2007 totalled at a mere 111,780, which is a 14.3% fall since 2006, raising fears for the future of this important form of insurance.

Swiss Re suggest that this lack of investment in Income Protection Policies by the British population at large is due to a lack of interest and innovation from insurers an advisors.

The reports suggest that consumers simply are not aware of the plethora of different insurance policies open to them, particularly, in this case, insurance protection.

Head of Marketing at Swiss Re. UK, Mark Johnson, has said: “The life industry cannot use a perceived lack of consumer demand as an excuse not to raise people's awareness of the need for income protection.”

He goes on to say that fundamental changes are needed “to ensure that it does not disappear altogether, and the industry as a whole must promote the benefits of income protection if we are to make progress in helping consumers help themselves.”

But, according to a report in the Independent the credit crunch may actually serve to increase sales of income protection policies. If people fear that they may not be able to keep up with their mortgage repayments as well as their daily expenses, then providing there is enough interest in advisor's and positive marketing of IPPs then the slump could turn around.

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