Menu packages are not necessarily cheaper and you can get both cheaper premiums and more competitive cover by mixing and matching different plans from different insurers, he continues.
“Menu providers will promote the fact that you can save on multiple policy fees with a menu approach,” Carr says. “But this doesn’t matter a jot if the overall premium is more expensive.”
For menu policies to succeed, they must provide comprehensive cover at a competitive premium for every type of protection, Carr insists – and that is a tall order.
Philippa Gee, director at advisory firm Torquil Clark, also prefers to order à la carte rather than from a set menu. She says that by choosing individual product providers who excel in one specific area you get the best cover, underwriting and claims handling for each component – and advisers should not be dazzled by an extensive menu.
“Standalone IP provides the most valuable long-term cover and is a major requirement for our clients,” he says. “You don’t need a menu product to get that.”
So what about the man whose fast-food habits launched the revolution? Bright Grey’s Edwards says menu plans have proved their worth, provided the individual components are not junk.
“The insurer can’t just be good at life insurance, it has to be good at everything, because it isn’t just competing with other menu packages, but standalone policies as well,” he says, adding that menu plans are a great way for IFAs to add value.
“Bright Grey may charge, say, £20 a month for £150,000 joint life cover, while Norwich Union might undercut us by charging £19 a month,” Edwards continues. “But our menu cross-subsidises itself, allowing us to offer two single life policies for, say, £21, doubling the potential payout. This gives the IFA the opportunity to create value for money combinations.”
But he notes that Legal & General and Norwich Union still boast around half of the term protection market, and accepts that menu plans could pay the price for their complexity.
“As the market gets competitive, underwriting standards have tightened and application forms have got longer,” Edwards says. “Have menu products got too complicated? Perhaps. They are great for holistic IFAs, but could be too complicated for many brokers. Perhaps we should look at pioneering something more simple as well.” Could be time for another burger.