Many insurers have come under pressure from industry professions, media sources and the Financial Ombudsman Service to reform or even remove this incapacity definition as an option for consumers. COVER Magazine has even launched an Income Protection Campaign to promote the reform of this definition.
In order to make a valid claim with this incapacity definition a policyholder would need to be unable to perform a set number of tasks from a small list of 'daily activities', such as being able to walk or climb stairs.
Tom Conner, head of protection at Drewberry Income Protection, says:
"When the 'own occupation' definition of incapacity is used income protection is an extremely valuable product and should be the foundation of every working adults financial protection.
"However, it can be very difficult to claim from a policy with an activities definition of incapacity and unfortunately too many people are taking out these policies without really knowing what they are covered for until they go to claim.
"The purpose of income protection is to payout if someone is unable to work due to illness or injury but this really isn't the case when the activities definition is used. To a lesser extent this is also the case for policies using the suited occupation definition. We are firmly behind the industry movement against the use of Activities of Daily Living and believe anything less than an own occupation incapacity definition causes confusion and can really hurt consumer confidence in the product."
How the tool works - Know your incapacity definition
In order to help raise awareness of the occupation definitions used by insurers and aid consumers with their research, Drewberry have developed an income protection incapacity definition tool that reports the likely definition used by insurers based on four key aspects of the individual's job.
After inputting their occupation, amount of time spent undertaking manual work, business mileage and number of overseas business trips the tool returns a likely occupation risk class, incapacity definition and even suggests insurers that are likely to offer own occupation cover.
As with all tools, the purpose is not to replace an adviser but to help educate consumers on one of the key areas of consideration, making product research easier and encouraging comparison based on more than just price.
/ - Informational resource for implementing group health and protection schemes as part of an employee benefits offering.
http://www.drewberrymortgageinsurance.co.uk/ - Informational resource for arranging mortgage protection insurance, such as life insurance and payment protection.
http://www.drewberryhealthinsurance.co.uk/ - Informational resource for arranging both personal and family private medical insurance (PMI) plans.
Drewberry Ltd is an appointed representative of Chase Templeton Ltd which is authorised and regulated by the Financial Services Authority, register number 311612. Registered address: Vantage House, 1 Weir Road, London, SW19 8UX.
For further information please contact:
Andrew Jenkinson
Drewberry Ltd
