Sometimes in life, we all need a helping hand. This is particularly true when it comes to financial planning. Financial decisions are made every day, whether it's budgeting for the weekly shop, paying bills, buying a home, or planning for retirement.
However, too many of us still don’t realise the importance of protecting the one thing that underpins all these financial decisions – our income. A sudden loss in income due to illness or injury could happen to anyone and have a potentially devastating impact on their financial situation.
The value of good advice
Arguably the need for income protection (IP) insurance has never been greater – particularly for the near five million people who are self-employed*.
Self-employment can offer several benefits however it also comes with risks. Having to take time off work due to illness or injury can result in a complete loss of salary, with little or no support (such as the Government’s statutory sick pay scheme) to fall back on.
The self-employed labour force represents a growing protection opportunity for advisers. IP provides a valuable financial safety net for everyone, but despite the need, our research has revealed that only one in ten self-employed workers has purchased an IP policy**.
Making the case for protection
Common barriers to selling IP include clients not understanding the need for cover, a perception that it's costly or that it’s too complicated to sell. Advisers can raise awareness of the need for IP by asking clients how much they have saved for a rainy day, or how they would support themselves if their income suddenly stopped.
Many of us would like to believe that ill health or misfortune is something that only happens to other people or the elderly. The truth is that financial hardship can affect anyone at any time – regardless of age, income, or employment status.
The average claimant on The Exeter’s Income Protection Plus policies is in their early thirties - an age where people may be thinking about saving for a house or starting a family. Many IP policies also offer increased flexibility allowing advisers to tailor cover to suit individual needs and budgets, meaning the argument for the cover being too expensive can quickly be overcome.
It’s time to put income first
We believe that IP should be the starting point for every client conversation. Its inclusion as part of a holistic financial planning recommendation allows advisers to give even greater value and peace of mind to clients and their families. Together we can demonstrate that IP is a necessity, not just a ‘nice to have’.
To find out more about our “Ill-Prepared 2020 – the self-employed financial resilience report” book a short webinar with one of our Adviser Account Managers by visiting www.the-exeter.com/adviser.
* www.ons.gov.uk
** The Exeter – ill Prepared 2020 – the self-employed financial resilience report
