SETTING THE RECORD STRAIGHT ON INCOME PROTECTION.
When it comes to insurance, we’re often quick to protect our cars, houses or contents as the consequences of not doing so can be serious. However some of us don’t think about insuring the very thing that allows us to afford these things, our financial wellbeing, meaning many remain unprotected.
On the front line of the UK’s ‘protection gap’, you’re probably fully aware of the lack of awareness amongst consumers about their situation should they be unable to work long term. Nowhere is this clearer than with Statutory Sick Pay (SSP). Our ‘Workplace Wellbeing’ research found that employees grossly overestimated the value of SSP (which was £88.45 in April 2016) by an average of 62%. Three-quarters (76%) of employees thought SSP was £100 or more per week, and 15% even thought it was over £200. Once these employees were aware of the reality of SSP, three-quarters of them said they would only last at most one month before having to cut back on monthly outgoings. This is where income protection comes in to play, helping to provide the financial security families need by paying out a monthly benefit should they be unable to work due to an accident or long-term illness. Without such a policy in place, and in many cases without the savings to provide a financial safety net, managing a household financially can turn into a cause of constant stress. Within the industry, we know both the importance of income protection, but also the difficulty in raising the protection conversation with consumers. As we know, lengthy mortgage applications, for instance, can deter many people from taking the time to also discuss protection. However, it’s so important that you initiate these conversations with your clients and as a duty of care. That means making them fully aware of the reality of the challenges they could face if left unprotected, as well as discussing suitable policies that could provide the safety net they need.
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