Yeh, a sticky one alright.
Suppose the same could be said for geared funds & endowment policies or other products that were brought out at differant stages of the Life industry. The public demand and they get whatever products they want.
Mortgage payment protection is not the ideal policy for all, but its a bit premature to be saying that they definantly wont be paying out if a claim is made. Once these are highlighted to the client I dont see how its bad advice to take up the product.
I do agree that the criteria in which the companies use to conclude who is entitled to a claim are a little vague, but surely the ombudsman could force a claim payout if they were taking the mickey? I assume that this would be the main concern of some brokers reluctant to sell the product?
I have friends whom I have discussed all their ins and outs and what they should and should not have. Given the fact that the have very little disposable income its difficult for them to justify an expensive critical Illness policy (they are both smokers, one of them has serious health issues). One is the main breadwinner and they would be in serious trouble if he got sick or made redundant. He works for a reputable company and isnt actually that worried of redundancy.
I recommended PHI, but the client has their hearts stuck on taking out the mortgage income replacement. The whole Involuntary redundancy thing has really struck a note with the public. Opportunistic at its finest, but thats the nature of any industry. Like in any industry, we can only highlight the advantages and disadvantages of a product and let the consumer decide. That said there is a market for "opportunist" salespeople to take advantage of peoples insecurities!
If I am not meeting a client to discuss the policy I highlight the cost of the product, the limitations medically (if you have a condition before the product taken out, void policy) and that its Involuntary redundancy. I also stress (in bold) that they read through the terms and conditions (I send out the summarised and long winded T.O.B.'s.
Some people incorrectly assume (or badly advised) that this policy covers you in the event of redundancy, which is not the case. It covers you in the event of redundancy UNDER THE TERMS AND CONDITIONS OF THE POLICY.