To those within the insurance industry it is very clear that income protection and payment protection are two very different products, with two very different purposes. However, one would not realise this given the way these policies are marketed. It is often the case that payment protection policies are lumped under the umbrella of income protection, which is a potentially misleading action by agents and insurers.

The reality is that consumers are not as informed as industry professionals and do not know the ins and outs of these policies which seem similar in nature. When individuals are looking for a policy that will protect their finances from the risk of accident, sickness or unemployment the term that seems to fit best is ‘income protection’, and that is what they search for in Google. SEO and marketing directors can see this and therefore slant their marketing material (including their website content) accordingly. The issue is that a large proportion of these consumers are not actually looking for this product, they are in fact looking for payment protection.

In my time as an insurance agent I have come across numerous individuals who have mistakenly purchased income protection when in fact payment protection would have suited their needs far better. Of those who bought the wrong policy, the most common shock was to find out that their policy did not cover them for redundancy, which is covered by payment protection. These consumer ‘mistakes’ are far too common and opens the door to suggestions that the insurance industry could be accused of misleading customers by intermingling these terms in an unclear manner. It is clear that new industry standards should be set out to separate the use of the two terms and prevent any further consumer confusion.