It is often thought of as the foundation of protection, yet when it comes to sales, income protection remains the forgotten relative of life and critical illness cover. So what is the real state of play, and is it worth re-visiting IP, asks Andy Philo.
You will have no regrets
Just picture a client coming back a year after buying life cover through you. They have suffered a long-term illness and had to give up work.
They cannot cover all of their bills, including their mortgage payments, meaning they have to sell their home. What's more, they cannot afford to pay the premiums on the life cover you advised them to take, so they lose that cover and you lose a large chunk of your initial commission.
To add insult to injury they find out that you could have sold them a product that would have prevented all of this from happening: income protection. So surely it is worth adding one simple question to your client questionnaire: ‘How would you pay the bills if you fell seriously ill and were unable to work?'
“IP is currently the only protection product not offered by the main comparison sites, because it isn’t as straightforward as life or CIC, so it gives you the perfect opportunity to add value”
It can help to grow your business
Just adding a question into your client questionnaire doesn't mean everyone is going to take out IP, of course. After all, budget restrictions may put it out of reach for some.
But even if just two of your clients do opt for IP each month, then that could mean an extra £13,000[***] in revenue every year, and you don't need to find any new clients either.
So with an increasing need for advisers to demonstrate value, and cuts to state benefits, has there ever been a better time to talk about IP?
Andy Philo is director of franchise distribution at Vitality
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Sources:
[*] The Work Foundation, 2015 -
http://www.theworkfoundation.com/Reports/388/Investing-in-a-Workforce-Fit-for-the-Future
[**] UK Government, 2015 -
https://www.gov.uk/employment-support-allowance/what-youll-get
[***] Based on a 40-year-old, non-smoker, occupation class one, £1,000pm benefit, 25-year term, VitalityLife Plan with Comprehensive Income Protection, six-month deferred period, and guaranteed premium, June 2015.
