The word protection has ‘toxic' connotations due to consumers wrongly associating products with the PPI scandal, according to the chairman of the All Party Parliamentary Group for Insurance and Financial services.
Jonathan Evans MP warned that consumers had "heard the toxic P word" which was perhaps putting them off unrelated protection policies such as income protection.
He was chairing a session of the All Party Parliamentary Group for Insurance and Financial Services which met to discuss welfare reform with representatives from the ABI, Unum, Zurich and Aviva.
He added: "In meetings I have highlighted the great damage the word protection has had from the whole of the PPI scandal and the tragedy that that has coincided with a time when probably more people have needed protection than ever before, against a background in which the word protection has taken on this toxic connotation."
Julie Higman, income protection product manager at Aviva, said: "Before I started at Aviva I'd never even heard of income protection, though I'd been working in finance my whole career, so it's not really surprising Joe Public hasn't heard of it either."
She told the committee that 47% of employees applying to Aviva for income protection had sick pay arrangements from their employers.
The MPs heard the opinions of the industry on how income protection was viewed by employers as well as how it was useful for employees.
Andrew Potterton, head of proposition development at Unum, said: "Employers value the consistency that comes with having income protection products.
"It's not a relatively uninformed or inexperienced line manager having to decide whether the absence is valid, there's an insurer sitting behind that who can give some expert opinions on the way."
