Lack of flexibility and limitations on bolt-ons have been eroding the value of term assurance, an adviser has warned.
According to advice firm Pethericks & Gillards, term assurance sold "reasonably easily" but limitations on add-ons decreased value and caused market churn.
John Morgan, financial adviser at Pethericks & Gillards, said Legal and General was particularly strong in its offering with flexible add-on options, menu-based approach and family income benefit.
He said: "The biggest issue is when there are no menu-based approaches. And insurers need to let clients dip in and out of life cover as life changes. For example, if a young couple have children there should be a family income option."
Morgan added that without flexibility it often meant re-applying for a new policy which could mean losing older, more valuable critical illness definitions and re-writing into trust.
Bonnie Burns, product and technical director at L&G, said there were differences across the market with bolt-on limitations which all showed in premium prices.
She said: "The industry has worked hard to bring the price of term assurance down. If the rules are less strict when it comes to add-ons and claiming then the price will go up. It is all about balance.
"The challenge for the industry is ensuring all the terms and conditions are explained to policyholders before they buy."
