Defaqto has released a guide to short-term income protection (STIP) and said it believes new opportunities are emerging in the market despite the mis-selling of payment protection insurance (PPI).
The research company has vocally backed the IP market following the fall in public confidence because of the PPI scandal and suggested IP is in a prime position to fill the resulting gap in cover.
As COVER revealed in May, Defaqto identified the number of STIP providers has doubled in the last two years, prompting it to produce a guide to the market.
It began rating the market in February.
‘Given the current economic environment, people should be conscious of the need to protect themselves against loss of income,' it said.
‘As a result, the potential exists for advisers to actively promote the customer-focused benefits of STIP - and indeed long term income protection - which protect people's lifestyle expenses rather than just their mortgage payments.'
The guide addresses how current conditions present opportunities for brokers selling STIP, including:
- up-selling from mortgage payment protection insurance (MPPI);
- contextualised explanations of the differences and similarities between short term income protection, long term income protection and MPPI;
- purchasing leads from aggregator sites due to increased shopping around;
- and detailed breakdowns of STIP products.
Ben Heffer, insight analyst for life and protection at Defaqto, said: "Despite the well documented problems with PPI, the protection market still offers real opportunities for advisers - and income protection can certainly add value for intermediaries.
"The key is how advisers take advantage of the potential offered by STIP and its longer term equivalent.
"Although brokers selling STIP should be aware of its limitations, it should at least be considered alongside other protection products to offer truly comprehensive cover," he added.
The guide is available from Defaqto's website.
