We need to reframe income protection in the eyes of customers, writes advice expert Matthew Chapman
All the obviously terrible aspects of Covid to one side, you could argue that being locked in our homes for months on end, being starved of social interaction and having to adapt to totally new ways of working has in a way been a blessing in disguise; in that is has forced us to look at our lives differently and reassess what is truly important.
Things we might have once taken for granted have suddenly gained much greater significance and value to us. I have certainly felt a strong need to reach out to my family and elderly relatives more often than before - just to check in on them.
Other things, such as the 05:30 alarm or the long commute to work have actually been eliminated from our lives - for now at least. I have spoken with several friends recently who have revelled in the opportunity to be able to read to their young children at bedtime. I know of people who have gained up to four hours a day by working from home!
The fact that we are all being required to look at our lives differently gives us the perfect opportunity to reframe what it means to earn an income.
Depending on how you look at it - for many of us there have certainly been some positive shifts across various aspects of our lives, and we should embrace them whilst we can.
You see, it all really depends on perspective and how you choose to look at the situation you are faced with.
I like to refer to this process of looking at any situation with entirely new eyes as ‘reframing'.
Over the past year, we have seen a renewed sense of focus towards income replacement solutions most likely fuelled by the pandemic and our sudden realisation of our own financial vulnerability.
And whilst this is extremely encouraging, there are still those who remain sceptical of ‘lifestyle insurances' such as income protection.
We need to try to reframe income protection in the eyes of consumers so that they not only see the importance of protecting their income but also begin to share our enthusiasm, trust, and confidence in the product too.
Today, I want to try to do two things. Firstly, I want to try to reframe what it means to be able to earn an income, as I think this needs some clarification.
Secondly, as part of this reframing process, I also want to offer an alternative way in which we might restore consumer confidence in our products.
So, what does it really mean to earn an income?
When describing the importance of income, you will often hear people from the insurance industry talk about ‘viewing yourself as your most valuable asset'. But I believe it is much more complex than that.
In reality, it is your ability to work that is truly valuable. And your time too. In many ways, your time is actually your most valuable asset.
Think about it - when you go to work, all you are really doing is selling your time. You are selling precious hours and minutes of your life to your employer or your business (if you work for yourself).
Time that you could otherwise spend with your family or doing whatever makes you happy.
In return, you are paid for your time. You sell this time because you need the money it generates to pay for your lifestyle and the activities you love to do in the remainder of your spare time.
It is nothing more than a trade-off. Your time for money.
But if you fall ill or get injured and are unable to work, the value of your time suddenly plummets (not societally but in terms of productivity and profitability). Hence why you don't receive endless sick pay.
Products such as income protection are a means by which you can continue to be compensated for your time in the event of incapacity. They continue to place value on your time even when others won't.
Perhaps, this is how we get clients to trust the product more - by describing how, in the event of incapacity, our products will continue to value them and support them financially, even when their place of work can't.
The fact that we are all being required to look at our lives differently gives us the perfect opportunity to reframe both what it means to earn an income and why products such as income protection are not only valuable to us but place value on us, even when we are unable to earn.
Matthew Chapman is founder if MCAB and director of Plus Financial Group
