A recent report from Money Marketing suggests that your clients are failing to prepare for their future. This could leave them ill-equipped to deal with a financial shock.

This might not come as a surprise to you. Comparison site Finder tells us that of all the households in the UK that have a mortgage, only half have Life Insurance in place. We’re also, according to Cirencester Friendly, twice as likely to insure a pet as we are to consider Income Protection.

Your clients may think that the state will step in to help them financially should they lose their income. They might worry that insurance providers will try their best to avoid paying out.

These pervasive myths could be denying your clients peace of mind and leaving them open to massive financial difficulties, should the unexpected happen.

The percentage of protection claims paid in 2019 was 98.3%

Figures from the Association of British Insurers (ABI) released earlier this year confirm that the insurance industry paid out more than £5.7 billion in protection claims in 2019. That’s 98.3% of all claims.

Back in 2017, 50% of more than 2,000 adults surveyed on behalf of Cirencester Friendly, said they would rely on the state if they had to give up working due to accident or illness. This despite almost three-quarters of those surveyed being in line to lose up to £300 a week if they moved to statutory sick pay (SSP).

The events of the year to date have made the need for protection products clearer than ever. So what types of protection should your clients be considering and what are the benefits?

Protecting against a loss of income

If your clients have dependents relying on their employment income, protecting that income is crucial. The sudden loss of a monthly wage could mean missed mortgage payments or school fees left unpaid.

With an Income Protection policy in place, however, a part of a breadwinner’s income will be protected if they are unable to work due to accident or illness. It will generally pay out until your client can start work again.

This payment could give your clients peace of mind that the household bills are paid if they were unable to work.

Protecting against Critical Illness

None of us like to think about the prospect of becoming ill. But can we afford not to plan for the possibility? Cancer Research UK confirms that half of the people born in the UK after 1960 will be diagnosed with cancer at some point in their lifetime.

By putting Critical Illness cover in place, your clients can receive a lump sum pay-out if they are diagnosed with certain conditions, as set out in the policy.

The conditions listed under Critical Illness cover usually include strokes and heart attacks. A policy will also likely include certain cancers and other conditions, such as Parkinson’s disease or Multiple Sclerosis.

If your client considers they might need Critical Illness cover, we can help them find the best policy.

Looking out for loved ones in the event of death

Life Insurance is the product your clients are most likely to consider when they think about protection.

A lump sum payable on death could pay off the mortgage on the family home, giving your clients confidence that their loved ones will be looked after.

There are different types of life cover to choose from too. Term Assurance pays out a specific amount only if the policyholder dies within the policy term, whereas Whole of Life cover guarantees to pay out on death but can be very expensive, potentially seeing a client paying in more than would be paid out on death.

The importance of seeking expert professional help

Protection policies are designed to protect your clients and their loved ones from the unexpected, be that a loss of income, a sudden illness, or death.

As well as helping to maintain financial stability at a potentially difficult and stressful time, having these products in place can give your clients confidence and a feeling of control over their future. This leads to improved peace of mind.

But it’s important that your clients take out the right policies and that they understand what they are covered for. Critical Illness cover will include some conditions and not others, Term Assurance ceases once the term ends, at which point nothing is payable on death, and Whole of Life plans can become unaffordable once premiums become reviewable, and potentially increase.

Expert financial advice can build these protection policies into a long-term financial plan that considers an individual’s circumstances, their needs, and those of their family too.

Get in touch

If you have clients that would benefit from having some form of financial protection in place, please get in touch with us. Email enquiries@boolers.co.uk or call 0116 2407070.