So, is price enough to make simpler products worthwhile?
According to Higgs, often the price differential between standard and simple products is relatively small or not in line with adviser perception of cost, particularly at low sums assured. This can provide a barrier to using simple plans as advisers find it easy to up-sell to a standard plan by highlighting the extra cover the client may receive.
"It's also worth bearing in mind that savings, as usual in life, come at a cost. In this case, access restrictions. For example, where there are limited underwriting questions, it will likely be the case that only healthier clients will qualify, or there will be limited age, sum assured or non-medical underwriting limits," explains Higgs.
“As such, advisers can often be wary of being caught out and unless they are absolutely sure their client will fit the profile, they will look at more traditional products.”
This reminds us of something similar a pensions adviser said years ago, that every layer of pensions simplification was by default complicated because you are adding to what is already there.
Naomi Greatorex, managing director of Health Protection Solutions, says: “This is a very relevant area right now as I get so many questions asking my opinion on simple products and whether or not they make the advice process even more confusing.
“In my opinion, the layers of different products make the advice process and also clients more confused. It is useful to encourage a conversation with clients on cost versus more comprehensive benefits, however it is complicated.
"I also think as we get more and more complex choices and more with/without options, this could be a turn off for advisers who do not give protection advice regularly.”
Kevin Carr is managing director and Suzanne Clarkson is associate consultant at Carr Consulting & Communications
