A staggering 2.6 million people in the UK are currently unable to work due to long-term illness alone. Having a life-altering health problem is bad enough but when you consider many of these individuals can’t earn a living due to their situation, it’s a sobering thought that begs the question: Why is Income Protection the ‘forgotten child’ of the insurance market?
Whilst the future is unpredictable, it is possible to lessen the knock-on effects of potential health problems. One way for your clients to shield themselves from the financial fallout of illness or injury preventing them from working is with Income Protection Insurance.
Why is Income Protection Insurance important?
Comprehensive coverage
Income Protection plans allow customers to cover any condition that leaves them unable to work, compared with critical illness cover which is a predefined list of conditions only paying out on diagnosis of a specific condition, potentially leaving many customers without protection. When 104.9m working days were lost to sickness absence for those with long term health conditions in 2022, there is certainly a need for people to protect their income.
Flexibility
There are shorter and long-term retirement plan options to suit different budgets. These can also be updated when the client’s circumstances change, such as if they get married, have a baby/adopt a child or change jobs, to ensure their cover remains relevant.
Enhanced benefits included
Income Protection plans quite often include a range of additional benefits. For example, at Shepherds Friendly, a virtual GP service, an emotional well-being platform and Nuffield Health gym discount are all part of the plan and can be used by the customer regardless of whether they make a claim.
Can be vital for younger clients
Statistically, younger demographics are more likely to be off work ill than die or get a critical illness, so while life and critical illness are vital parts of the protection proposition, having this Income Protection insurance in place could make all the difference if they were left unable to work. Plus, Income Protection plans can be claimed on more than once, so if people are off multiple times throughout their careers, they can continually make the most of their plan.
Advisers and customers also now have the option of a simplified application without the need for underwriting decisions, meaning you can get cover quicker than ever before. A survey of advisers* in 2023 revealed that ‘underwriting decisions and processes’ were the main pain points of selling Income Protection, but with a modernised process, the experience is smoother, offering an instant eligibility decision.
All in all, Income Protection is an essential, yet frequently underestimated, part of financial planning, as it can offer your client invaluable support in times of need. The fact that millions are already suffering from long-term illness that prevents them from working only highlights the need for this kind of protection, yet not enough people are taking notice. Income Protection Insurance can not only safeguard someone’s salary but it can also provide added peace of mind.
*Source: COVER Survey: Advisers damning of protection insurer service levels (covermagazine.co.uk)
