The Income Protection Task Force has claimed that insurance bodies are profiting far too much from their 'expensive' payment protection insurance products. Many of these products are deemed to have been mis-sold on the back of mortgages or personal loans by insurance providers.
Aiming to encourage the uptake of income protection, a product which provides those unable to work with a regular monthly income, the task force has put forward the suggestion to the regulating body to implement changes that would limit the profits made by financial institutions selling the controversial product to customers.
This is supported by Teresa Fritz, principal researcher for the money research group at consumer watchdog Which? who, cited in This Is Money, said that despite the obvious need, consumers are not buying the right protection products because financial advisers, mortgage lenders, banks and insurance companies were either selling the wrong products or none at all.
However, reiterating the earlier point, she added: Which? has been a big advocate of income protection for many years and believes it should be the first choice of protection for many people.
According to the taskforce, also cited in This Is Money, little change will be made until current profits on sales of PPI, where commission is typically up to 80%, are curtailed.
Other recommendations made by the task force include implementing measures to increase consumer awareness of their own personal protection gap. In addition, advisers should be reeducated with better training and those dealing with customers on disability issues should sit appropriate exams.