Director of Distribution and Marketing - The Exeter
15 November 2021
3 min read
To the person on the receiving end of this advice or opinion, it can become an annoyance. The person delivering the message does so because they believe in the message or advice they are giving.
When talking about income protection (IP) it may seem like the message is the same year after year. To some, we may even be a “broken record”. But for me, the record isn’t broken. It’s not played loudly enough.
Income replacement? There is only one winner.
The financial support provided by the government during the pandemic was generous. At its height, the furlough scheme replaced up to 80% of an individual’s income¹. But in its absence, we must remember that such support is not always as generous.
Taking furlough out of the income replacement equation, what are the options for your clients if they are unable to work due to illness or injury?
Those with employer sick pay schemes may have the benefit of a higher proportion of salary being paid for a period. But what happens longer-term when the amount paid reduces? How would they cope with a reduced monthly income?
And for those with no access to employer sick pay, how would they manage on Statutory Sick Pay of £96.35 per week² or Universal Credit which starts at just £257.33 per month³ depending on an individual’s circumstances?
When you consider the amount of personal taxable income that IP policies can replace in the event of a claim, (60% with most insurers), there is no reason why we shouldn’t be having more IP conversations than ever before.
Unlike furlough, IP policies may not be free for individuals to access, but at an average cost of £32 per month⁴, surely that’s money well spent. For those with tighter budgets or wanting to cover essential outgoings such as rent or mortgage payments, never has there been more choice for advisers to tailor cover to meet their client’s needs.
Turn up the volume
Collectively we must ensure that we all have more conversations with consumers about IP than ever before in 2022. The first-ever Income Protection Awareness Week run by the Income Protection Task Force (IPTF) provided a timely shot in the arm for the industry, reminding us of the importance of protecting our incomes from the impact of ill health and injury.
With this in mind, I offer no apologies if I sound like a broken record by continuing to talk about the importance of IP. Why? Because I firmly believe in the message I’m giving. That now more than ever, the need for IP is greater than it’s ever been.
To find out more about income protection from The Exeter visit http://www.the-exeter.com/adviser and book a product overview with one of our adviser account managers.