Critical illness cover: FSA research
The Financial Services Authority (FSA) has praised critical illness cover advisors, saying they are "central" to the customer’s purchase decision.
Research by the FSA found that nine out of ten customers recalled the advisor verbally explaining the insurance product and 95 per cent said they found the advice useful.
However, it was also revealed that 70 per cent of customers believed they were being given advice during an execution-only sale.
The FSA’s post implementation review of Icobs (oral disclosure rule in sales of critical illness cover) identified this as a grey area in consumer understanding of what constitutes an advised and non-advised sale.
Further misunderstandings involved knowing what illnesses were covered by the policy, with 46 per cent of people believing they were covered for all types and severity of cancer.
The report was the first piece of analysis of CI sales since the Icob rules were introduced in January last year.
Most financial services markets, exchanges and firms are regulated by the FSA, which is an independent non-governmental body with a board appointed by the Treasury.
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