Matthew Chapman is back with his next instalment of income protection conversation starters
Most people simply aren't aware that everything that they work so hard for is constantly at risk. It is simply inconceivable to them that something as simple as a short-term illness or injury could cripple them financially and destroy all their future plans.
The best way to highlight the importance of regular income, and the impact of not having one, is to explain to the client how their income indirectly influences their future goals - even as far away as retirement.
Tip Four = Ring fence your past, ring fence your present, ring fence your future
This technique is all about focusing on the indirect benefits of regular income and relating this back to the client's own life and financial goals.
Ring fence your past
Most of my clients are usually saving for, or working towards, some kind of financial goal. Whether it's the dream holiday, the deposit for their first home or that new car.
If their income stops suddenly then, chances are, the first thing they will do is start eating into their hard-earned savings just to survive.
If they're looking to buy their first home, this could see their deposit being eroded. In turn, this can seriously limit their chances of ever getting a mortgage.
If they're already a homeowner, losing their income could result in them losing the home they've spent all those years paying into.
Income protection could ring fence your home, your savings or your deposit throughout any period of incapacity.
Ring fence your present
Beyond the obvious risks associated with losing your income (such as the ability to put food on the table and keep the lights on) there are other, less apparent consequences too.
When someone's income stops suddenly, it becomes a question of prioritisation. Credit commitments, such as loan payments, credit card balances or overdrafts are often ignored in place of more essential expenditure.
This can have a disastrous impact on someone's credit history, making it near impossible to obtain new credit in the future. Not just large commitments such as a mortgage but basic credit such as monthly home or car insurance premiums.
Income protection could ring fence your credit score and your ability to borrow by enabling you to keep up with your repayments throughout any period of incapacity.
Ring fence your future
Many clients believe that if they were unable to ever return to work due to incapacity that they would simply be ‘pensioned off'. But who wants to eat into their retirement fund if they don't have to?
Tapping into your pension pot early, simply due to ill health, is unnecessary and could seriously impact your quality of life in later years.
Income protection could ring fence your pension and future life goals by providing essential financial support throughout your working life and into retirement.
Matthew Chapman is business & practice protection expert at Plus Protect. Find him on LinkedIn.
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