Financial advisers are getting into PMI

03 February 2022

In research undertaken by Defaqto in October 2021, advisers were asked to indicate which individual protection products they use in their recommendations. Unsurprisingly, term assurance (level and decreasing), critical illness cover and income protection insurance were the most popular products with similar levels of support to previous years. Sadly, family income benefit and whole of life assurance received less support this time. However, an interesting development is the increased level of support for private medical insurance (PMI) among this sample of respondents, who were for the large part general practitioners and mortgage brokers, not PMI specialists.

Ben Heffer, Insight Consultant

In 2021, 31% more advisers said they wrote PMI business than in 2020.

Traditionally, concerns about capacity in the NHS, perceived or otherwise, drive consumer interest in PMI and there is no reason to doubt that the pressure on services as a result of the pandemic will have been a factor here. It is encouraging that generalist financial advisers are taking more of an interest in PMI though and, providing they have the skill set on board to deal with this specialist line of business, this has to be good for the sector.

Advisers’ recommendations should be underpinned by sound research based on a good source of quality comparative product information. Many advisers use Defaqto Engage for their product research, covering as it does all investment products, funds, platforms, pensions and protection including PMI, group PMI, International PMI and Cash Plans.

The software has full product details of nearly 50 individual PMI plans, over 70 group plans and over 150 international plans from some 38 providers. Additionally, the app covers full details of over 250 individual and corporate cash plans. The information is dynamic, being updated in real time by Defaqto’s team of researchers as and when products change; and regular scheduled reports can be generated from the system to keep advisers up to date in their product research.

There are other sources of comparative product information in the protection space, but I am proud of the contribution Engage makes to supporting intermediaries in their dealings with clients. Protection advice is so important in a world where we are increasingly being asked to self-serve. Apprising individuals of their financial needs in the first place and then devising appropriate solutions is best done by qualified advisers. Professional advice from qualified practitioners based on sound product research is the recipe for better served and more fully protected customers.

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