The Income Protection Task Force (IPTF) has claimed it has developed a quick and easy system for identifying families who have a clear need for income protection.
The industry body Is addressing fears that simpler income protection plans aimed at the mass market could cause confusion over state benefits, which would restrict the appeal of these products.
Peter Le Beau MBE, chairman of the IP Task Force said, "The system tries to guage income and match that with current eligibility for state benefits, essentially they put people in categories.
"We have found that four questions can more or less slice and dice the entire UK population.
"There are a lot of old wife's tales about IP around the value to those who are less well off. In reality, in many cases, these are the people who would perhaps benefit most."
The news comes shortly before the industry decides on the way forward for simple income replacement following the consultation paper earlier this year.
IPTF believes it will help to provide a sensible road map for families looking at how to protect themselves if the main breadwinner is too ill to work.
Nick Kirwan, executive committee member of IPTF said, "Welfare entitlement is extremely complex so we have developed a short set of simple questions designed to cut through this. The questions identify people who have a clear need for income protection where the benefits would have no significant impact on their entitlement to welfare support."
The IPTF is currently running more data analysis refining the concept before releasing specific questions to industry.
Alan Tyler OBE, who led the working party looking at this area, added, "We can see a number of ways in which the link between public and private support could be improved for these families too, thus extending the scope for IP still further and reducing the number of people having to seek means tested support from the state."
