No need to recommend CIC over IP or vice versa: use both for proper protection, writes Justin Taurog
• The average household in the UK spent £517 a week in 2013 on just the costs of running a house, food, clothing and recreation: Excluding mortgage payments.
• The average household income for a family with two children, allowing for tax and benefits, is £31,000 per year.
• Assuming that the average household has two working adults, then should one of them fall ill, the household income may halve to £15,500, or £298 per week.
• Based on these figures, that's a weekly shortfall of £219. Even if the person off sick was entitled to the highest rate of ESA of £109.30, that's still a shortfall of £109.70, and this is excluding the cost of a mortgage.
My client already has CIC so doesn't need IP
When advising on a client's protection needs, advisers will generally recommend one product or the other, but this is isn't necessarily the right thing to do.
For example, the illnesses that cause the most prolonged absences from work, such as back pain, musculoskeletal problems, and mental health illnesses, are not covered by a CIC payout.
In fact, both IP and CIC work very well together. Whereas CIC offers your clients financial protection against many life threatening conditions, IP will cover your clients for any long-term condition that prevents them from working.
Additional help for your clients to get back to work
As well as the objections to IP, there are also a number of product features that come with it that make it a more appealing protection solution.
Some IP products offer your clients a recovery benefit at no extra charge. This means that treatment costs incurred in getting your clients back to work will be paid for, giving them the extra support they need to re-enter work as quickly as possible. In addition, some IP products in the market offer financial incentives to encourage return to work.
So, when speaking to clients, there's no need to recommend one over the other. If you want to ensure your client is really protected, the answer is IP and CIC.
Justin Taurog is managing director of distribution at VitalityLife
