Should Income Protection be incentivised?

Income Protection has always been a challenging market for advisers to crack. 

Few people take out income protection as a necessity, believing they are better protected than they really are either from the state or from their employer, which unfortunately is not always the case. 

Another issue is that it is perceived as a complex product with a number of factors to consider  - the adviser needs to know what benefits the employer already offers to make sure that income protection is compatible, they need to know income and expenditure to make sure that they aren't over or under insured and there's also the period of deferral to consider - how long can someone feasibly survive before the protection payments actually kick in. 

But what is the answer?  There are certain brokers that feel, with the government cutting back on state benefits, something should be done to incentivise income protection, such as tax relief or auto-enrolment. 

But is the problem actually that not many people even know about Income Protection? 

Head of Intermediary Marketing at LV, Justin Harper suggests that consumers need to understand the importance of income protection.  He said "I don't think consumers are aware of the existence of income protection, let alone whether there's a pricing issue.  There are opportunities for lots of confusion. Advisers and clients need to see income protection as important; understand how it interacts with state benefits and how to understand concept of risk."

The general concensus seems to be that financial education is key to help clients understand what income protection means to them, and in the workplace is the most logical place for this to happen, with employees perhaps being offered group rates as an incentive.

But with employers already contributing to company pension schemes, would they want to subsidise income protection as a further benefit for their staff? 

As a broker, what do you think?  Could more be done to spread the word about income protection?

Share your thoughts - why not tweet us @soleads using the hashtag #ip

Original article via MoneyMarketing

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