Justin Harper, head of protection marketing at LV=, tells us why income protection is the ideal solution for clients' ever changing needs
Income Protection (IP) is protection for the living, protecting what matters most to your client, whilst they're still alive. It protects their homes, their holidays and hobbies, their rainy day and retirement fund - essentially it protects their lifestyle. So there's a positive conversation to be had around protecting income!
The evolution of your clients' needs
But, we know that clients will have a multitude of different needs that will vary depending where they're at in their life. Many of us will go through multiple major life milestones - buying a house, getting married, having children and changing jobs (on average we'll change careers 5-7 times in our life - that's a lot!).
And, with that being said our LV= Income Roulette research found that one in six people aged 30-35 are putting off major life milestones, such as having children and buying a home due to a lack of financial confidence.
We also know that the working world is evolving with the most prevalent change being that more people are now self-employed than ever before. Between 2001 and 2017 the number of self-employed people grew by 45%, flourishing with the rise of technology - Wi-Fi, cloud sharing services and video calls all mean that people can work from anywhere, at any time.
However, resilience of the self-employed is tested when they face unforeseen events, especially ill-health. Research from Aldermore states that over half said they have periods where they've been unable to earn money due to illness. And, of those who'd experienced a period when they were unable to work, almost half remained off work for more than one month, with one fifth losing over a third of the working year. We can also see that their earnings vary considerably month to month.
And, in these stressful times we know too well now that a mental health issue could emerge, with 1 in 4 people in the UK experiencing a mental health problem each year.
So, it's clear we need to offer wide ranging solutions that are flexible and adaptable to fit the clients ever changing needs, enter IP…
If you're looking to protect your clients who all have multiple demands and changing needs then IP is your go to product. Most providers offer a range of IP solutions catered towards varying budgets. There's the full blown bells and whistles IP paying out for the life of the policy and the 1, 2 and 5 year options as well as age-costed versions.
At LV= we've just added a 12-month option (guaranteed premiums only) to our Budget IP. It even includes all the same great benefits as our full IP making valuable protection more accessible with flexible benefits to fit the evolving world of work and needs of clients (you can find out more about that here).
Added features and benefits
On that note, IP is rife with added features and benefits, included as standard (by some providers - well LV= do anyway). There's fracture cover, death benefits, hospital cover, back to work payments, sick pay guarantees (covering the fluctuating income we just discussed) and payment holidays. Plus cover that protects not just the policyholder, but their child too. Such as parent and child cover from LV=, giving your clients peace of mind for if they do decide to hit one of those major life milestones and have children.
Additional support without a full claim
We can see that IP is evolving beyond just a financial pay-out, offering your clients support whether they're working, not working, or just getting back on their feet. This additional support comes in the form of remote GP appointments, prescription services, second opinions, physiotherapy, psychological support (should mental health issues arise - we can't ignore the statistics) and discounted health MOT's (other providers also offer similar value-added benefits).
These additional services are often available without making a claim, but customers tell us they value them more highly than any financial benefit they may receive from a policy. This shows that the industry can provide wider emotional, family, health and practical support for life's biggest challenges as well as little bumps in the road.
But, with all these great options available it's important that people can have an open conversation with an adviser that will help them understand their protection needs and the flexible solutions available to help offer peace of mind and protect them, their family and lifestyle against the unexpected.
So I'll leave you on this note…
I sat with one of our account managers the other day who told me how they introduce IP. They bluntly said I look at it like this - who doesn't have home insurance? And, I bet if I said to you, if you had a cash machine in your house that gave you £500 a week, would you insure it? A resounding yes would be the answer! Well that's what IP does; protect your clients biggest asset, their income. Working for you client when they can't and now even when they can.
There are so many ways we can have positive conversations around protecting a client's income and lifestyle (whilst they are alive), but it's finding out what makes your client tick!