Just as Covid-19 has given us a world full of face masks, hand sanitiser and ‘super spreaders’, it’s also given people the chance to think about their personal finances. At the peak of the pandemic, furlough was a reality that hit over a quarter of the UK’s workforce (1). This word ‘furlough’ that originated from 17th century German and was used to describe paid leave granted to soldiers, was suddenly thrust into the mainstream, talked about in the news, amongst friends, and became part of everyday conversation.
If you think about it though, furlough isn’t that different to income protection.
If your client earns £30,000 per year and was put on furlough at 80%, their monthly earnings would be £2,000 before tax. With income protection, they could be covered for 65% of their earnings, £1,625 per month – but this would be tax free.
Pitching income protection to clients can be difficult, with only 20% of people having a good understanding of what IP actually is (2). This is where you can potentially use the popularity of the word ‘furlough’ to your advantage. Simply put – IP is like a “personal furlough scheme that you set up for yourself in case you’re unable to work due to illness or injury”. This simple sentence is perhaps the best way to grab client’s attention and make the concept of IP much easier to understand before talking in detail about percentages, calculations, and the benefits of a guaranteed income.
Benefit Guarantee
If life has taught us one thing over the last 12-18 months, it’s that the unexpected can happen and does. The workplace has changed for so many people, grappling with the challenges of working from home, pets walking over keyboards and home schooling. Even for those lucky enough to still be working, their income may have reduced. It’s an uncertain future for many in their working lives. This is where benefit guarantees on IP can help.
Benefit guarantee is there to help make sure that if client’s income reduces, their monthly IP benefit doesn’t necessarily need to, so they can continue with the lifestyle they’re accustomed to without necessarily making cutbacks.
Hospital Benefit
We are all acutely aware of the amazing job everyone in the NHS has done over the last 12-18 months, but what many of us may have feared from the pandemic is being so ill that we need to be admitted to hospital. As of April 4th, 458,863 patients had been admitted to hospital due to Covid-19(3).
The hospital benefit that we offer is standard on our Income Protection+ product. Whilst we can’t remove any fears around ending up in hospital, we can help by offering a financial buffer.
Read our Income Protection+ policy conditions to discover how our product has been designed to protect against the unexpected and discover the Aviva difference.
(1) Office for National Statistics
(2) The Association of Mortgage Intermediaries, The new protection challenge November 2020
