Income Protection Awareness Week

Income Protection Awareness Week

With it being income protection awareness week, the Income Protection Taskforce are all set to bring us a number of sessions spread out over the week. Many people have other commitments, especially on a Monday morning, so we thought it may be handy to recap these.

With today being the first session, Jo Miller introduced herself and the other people who are to join her, Andrew Wibberley and Katie Crook-Davies. Jo explains the aim of the IPTF, which is to raise the profile of income protection and help more people protect their income. The aim of this week is not only to raise awareness of income protection, but also to reach out to advisers who may not be selling income protection to the best of their ability, and to equip them with the confidence, tools and knowledge they need.

Why income protection?

With the average household 24 days away from the breadline, and having less than £3,000 in savings, income protection awareness week is a perfect time to spread awareness and educate people on the importance of protection. 

• 1 in 5 households say they have no savings in place if they fall ill and cannot work.,
• 30% of mortgage holders say they could only pay their mortgage for a maximum of 2 months if their income was to stop.
• 1 in 8 people are forced to stop working before state pension age due to ill-health or disability. 
  
  

These numbers really highlight the need for protection. 

Income protection is all about protecting a person and their income, whether or not they have a family, dependants or any debts, it’s about making sure a person is able to carry on with their payments and living comfortably, if their income was to suddenly stop coming in. 

Growing the income protection market is partly down to advisers having the support they need to have more conversation surrounding income protection, it’s important that advisers feel like they have the correct tools to support those conversations, and that they are confident to explain things in new and different ways. 

Jo posed some very important questions; What if you can’t work for longer than a month? What if you couldn’t work for six months? These sorts of questions can really get your clients thinking about their true needs. Income protection can replace a high percentage of a person’s income, meaning they wouldn’t have to worry about what will happen if they are unable to work and don’t have their usual income to pay their bills.

What does this mean for me?

Speaking to a financial adviser can reap huge benefits, it gives you the added comfort of knowing you have had advice and guidance from a professional, as well as knowing that your true needs are then covered and protected. 

Do I need income protection?

Andrew moved on to show some figures about the need to increase sales of income protection. Only 9% of employed and self-employed have income protection, and only 6% of the UK in total have income protection. These are alarming figures and in a growing market, insurers, advisers and others in the financial sector really have the opportunity to work together.

One big reason as to why many people don’t have income protection is down to the fact that they don’t quite understand what it is, or they don’t see a real need to have it. This is where insurers and advisers can step in to really educate the public to increase their knowledge and create conversations surrounding income protection. Income protection should be part of each mortgage, wealth or protection conversation that is had with a client as they all go hand in hand.What happens to the financial plan, the mortgage, the life insurance if there is no income to pay for it?

7 in 10 people now see income security as a big priority in wake of the recent pandemic, with the pandemic showing many people that you can’t fully prepare for or know what is going to happen in the future. Having protection in place can give a client some peace of mind. 

During the pandemic, the government introduced their largest support package for those unable to work through no fault of their own. Without this, there would have been many people really wondering how they would get by week to week, never mind having a financial plan.

Tomorrow’s session focuses on the mortgage market and how income protection can be included in the mortgage conversations.