So, you haven't sold income protection to your clients. What's the worst that can happen? According to John Bridge, an awful lot...
Although I have been involved in the sale and marketing of financial services since 1975, this feature is written by a newcomer to income protection (IP). Now specialising in Holloway IP, it is surprising that many aspects of this section of the industry have not been obvious before.
A NEWCOMER'S DIARY
But before we discuss the perils of not having IP, what could go wrong in my life? I am quite comfortable, live in a well-appointed house full of nice furniture and expensive electrical goods, I drive a luxury motor car (in fact, I own three cars), have enjoyed 41 years of happy marriage and my wife has a cat that she adores.
In addition, the house is insured, the contents of the house are insured, all three cars are insured, my wife is insured and so is the cat.
But where do all these luxuries originate from? In this case, not from a family legacy but from a shrewd business brain and years of hard work. So if either the brain or the body fail to function, all these luxuries are endangered. That is what can go wrong.
We happily buy life assurance, while buildings and contents cover is compulsory if you have a mortgage. Similarly, motor insurance is the law of the land and even pet insurance is popular because we love them dearly. But only 7% of the UK population has IP cover, the very thing that is designed to protect all of the material possessions.
So it is worrying to hear a massive 93% of us have no provision for loss of income because of illness. Some people rely on their employer to stand by them when illness strikes. Many may be lucky in their employment and get paid for the first three, six or 12 months of incapacity.
Other than this, Statutory Sick Pay (SSP) is the only payment to which our employer is obligated - but this is little more than subsistence level. Those of us who are self employed have absolutely no help on which to rely. So, there is no question that the argument for IP cover is most compelling. Every home should have one policy - or two, if both partners work.
