Paul Robertson talks to Peter Le Beau of the IPTF's plans for a multi-disciplinary approach to IP in 2014.
“We have also had support from organisations like RED ARC, for instance, who are going to case manage each case that we have. So they would give the support they would give on a case-by-case basis, which has been very helpful.”
The big question is has the project got a green light for the cash? The IPTF has asked people in principle, for a maximum of £20,000, and has had over a dozen companies who have said yes, in principle. “Four or five companies are still debating on it but we have had very few companies who have said no,” said Le Beau.
“We have literally had a couple who said sorry, we cannot take part. That has been really because they just have not got the budget to do it.”
Fair enough, but once the cash is in hand, will the chosen families be paid at a rate that replicates what they would likely have been receiving had they taken out income protection insurance – how will the cash be allocated?
Le Beau confirmed that payments would be in line with a replicated insurance: “Yes, we are going to pay them on a monthly basis. And the payments would be along the lines of 75% of income. £20,000 would represent a reasonable approximation of the benefit they would get if they went for IP. So we have got to select people who are appropriate for that.“
Le Beau’s next target is the media. The IPTF is keen to talk to digital marketing agencies.
“We believe that the old idea that you had to get on TV or in the papers has all changed now with the viral nature of communication, particularly things like YouTube videos, which can trend very quickly on Twitter and stuff like that.”
But, of course there remains the TV angle. Le Beau said: “We have had some provisional meetings with production companies and they have liked the idea. They want us to firm up the proposition a bit more specifically before they go into too much detail.”
“I think the TV companies are going to be interested in this from the point of view of people’s battle back to work after serious illness.”
The element of the scheme that will probably have the most traction with the adviser community is the tied in concept of a software based on a series of short questions which will highlight, with reference to current benefit rates, whether a family would be wise to take out income protection or whether they would just be replacing state benefits with private ones.
Le Beau said: “There is a lot of uncertainty about whether people who are on below average income will actually benefit from taking out income protection or not. And these are a lot of the people who could well be affected by the programme, or the campaign that we are doing.”
Asking the right questions
Currently the IPTF team have got it down to four questions which it thinks will give people a 99% certainty about whether it is a good idea for families to take out IP or not. This is based on Excel software at the moment but it could easily be converted to any other program. The question is who would the caretaker be?
The task force has talked to an organisation called Policy and Practice, which has a universal credit calculator, but has also started off a conversation with the Money Advice Service (MAS). “At the moment, and it would seem to us that the MAS would probably be the best place for this to reside,” said Le Beau.
“Because if people come there looking for advice on income protection, one of the first things they need to know is will this product actually be any use. I think they are very interested in working with us on it.”
The idea is that MAS would take charge, curating it and updating changing benefits, for example. So it would be the Money Advice Service that paid for it as well?
Le Beau nodded: “Effectively, yes, I guess. Certainly it would not be too much in the way of maintenance. They would set it up and that would not be too expensive, we would have done most of the work already.
“There has been quite a lot of controversy within the industry between people who think this is not a good idea and others who say it is.
What we want to do is bring clarity to that whole process, to actually see who can do it and who cannot. Because what we do not want to do is for people who are not terribly well paid but still would be quite heavily exposed if the breadwinner was off ill not to take it up because they do not think they earn enough.
In more general terms, it is quite obvious that there is going to be no foot off the accelerator for fiscal tightfistedness from the Government. So, is this a movement back towards when protection was seen as a necessity by everyone?
“There is a very real hope that we can outline a very much welfare-based approach. And I think that really is one of the big challenges for the industry. Does it want to play in the welfare space in this area? Sales of income protection indicate that is has not wanted to in the past.
“I am very, very excited about this, this is the most positive I have felt about anything in the industry for years. It is to me shaming that we sell so little IP, when it is a product that can benefit so many people. “
It’s going to be an interesting year.
