The report produced a template for an Income Replacement product with guaranteed premiums and a relaxation on financial underwriting among proposals for a simple product that will enable many more people to buy cover for income replacement more easily.
Clive Waller, co-chairman of IPTF, said: "We are delighted that this look at Simple Products has concluded that there is a need for Income Replacement as a priority for a large number of people. We intend to fully engage in the consultation period with Carol Sergeant and her team to drive this forward."
Peter Le Beau, co-chairman of the Task Force, added: "It is salutary to note that in trying to calculate eligibility for this product the Working Party suggested a potential Market of well over 25 million people. That illustrates the massive lack of penetration of the more conventional product that sold about 110,000 new policies last year. Income replacement is a fundamental priority for a huge number of families in the UK and we must find a better solution to this need than we have hitherto. We hope this will be a wake-up call for the industry.”
The simple products steering group was set up by the Treasury in October last year and is headed by former FSA director and Lloyds Banking Group chief risk officer Carol Sergeant.
In its report on simple financial products, published last week, the group suggested a template for simple life cover as well as simple income replacement.
