The extent of economic abuse among insurance clients may be much greater than is widely believed, according to Matthew Connell, director of policy and public affairs at Chartered Insurance Institute (CII).
He said the problem of economic abuse exists for about 16% of adults in the UK according to a statistic from the charity Refuge.
Connell (pictured) said: “It really is a sobering figure that underlines the significance of economic abuse in terms of the life insurance market.”
“This statistic of 16% of adults in the UK have experienced economic abuse. This is a statistic from the charity refuge, and it’s used by the government in its economic abuse toolkit.”
He was giving a presentation on Spot the signs: How advisers can protect against economic abuse at Health & Protection’s Protection Forum at the Ham Yard Hotel in London on Wednesday.
Connell said: “I think it is meaningful to talk about maintaining economic certainty as a benefit and as a professional I think being able to draw people’s attention to the benefits of financial independence throughout their lives.
Connell said: “The extent to which being a victim of economic abuse might be a similar size of risk to actually needing to make a claim on your partner for term assurance.”
“The chances of experience economic abuse are comparable to the chances of benefitting from a pay-out from the policy.
“So economic abuse isn’t something that is incidental to a policy for a very small number of very unlucky people.
“Its something that is prevalent in society.
“And in some ways it is as important a factor to consider in managing and setting up a contract as the claims process which is obviously the most important aspect. “
And he noted that “25% of women have suffered their own abuse experience it after leaving the abuser.”
And as a way of minimising economic abuse, he said the CII recommends three trustees when setting up a trust.
“We recommend that where people are setting up a trust they appoint three trustees, to that there is three different people, so that if one of them is perpetuating they at least have to overcome the hurdle of persuading the other two that what they are doing is reasonable.”