If your client is unable to work due to sickness or injury, the state will only cover the most basic living costs, and benefits are only payable after rigorous assessment.
According to the Office of National Statistics (ONS), the average household spends £572.60 per week. So how would many households cope if the main earner was unable to work due to a prolonged illness and forced to rely on the state?
If they're not lucky enough to be employed by a business that offers enhanced sick pay, they may only receive (an improved) statutory sick pay of £95.85 for the first 28 weeks of illness.
Some employers only offer the bare minimum statutory sick pay (SSP), while others will offer extended pay for absent staff. Meanwhile, according to NICE, only one in five of those absent from work for more than six months return to work, so it's crucial that your clients understand what their options might be if this was to happen to them.
If they're unable to return to work, they may be able to apply for Employment and Support Allowance (ESA) provided they have paid sufficient National Insurance contributions. Yet even the ESA will only pay up to £74.35 per week for the first 13 weeks, whilst being assessed for the benefit.
Overall, state benefits can be hugely complicated and difficult to understand. At the end of the day, the state will only cover the most basic living costs and benefits are only payable after rigorous assessment. Those looking to protect their lifestyles need to go further and take a closer look at protecting the one thing which makes that possible: their income.
COVER has teamed up with L&G to help advisers talk about income protection with clients.
