Advice is key when it comes to protecting incomes

Understanding the need for products such as income protection or life cover has long been a common barrier to sale. However, with 70% of working adults now seeing income security as a bigger priority because of the coronavirus pandemic1, awareness of our financial frailties may never have been higher.

With 67% of working adults also concerned about a loss of earnings because of illness or injury1, the lack of a financial safety net for many is clear. However, just 22% have considered turning to insurance products such as income protection to provide them with added financial security1.

There is more to do

There may have been a time when income protection being considered by one in five working adults would have felt like a success. But whilst our collective efforts in getting to this point should be commended, we must do more.

We remain a long way from income protection insurance being front of mind for the majority of working adults. This is despite millions having to rely on Government support to subsidise incomes as industries ground to a halt with the introduction of social distancing and travel restrictions.

But despite the difficulties we have faced, how long before recent events become a distant memory? How quickly will we forget the financial challenges we have endured? How many of the 22% considering income protection will go on to make a purchase?

Throughout the pandemic, the risk of illness or injury preventing us from working remained. Even with the millions of workers on furlough, almost 63 million working days were lost in 2020 due to musculoskeletal problems, mental health conditions and minor illnesses2.

With this in mind, and the increased awareness of our financial wellbeing, it’s time for income protection to take centre stage.

Advice is key

With income protection insurance not considered by almost 80% of UK working adults1, the role of advisers in highlighting its value remains key.

Advisers are also integral in helping clients understand the support they would receive from the state if they were unable to work in the future. Without an employer sick pay scheme or substantial savings, many millions of workers may find themselves financially vulnerable if they are unable to work due to illness or injury.

For those without access to employer sick pay, there will be an immediate financial implication of being unable to work. The monetary support received in these circumstances is not as generous as the amounts offered under the furlough scheme.

It's time to start building momentum

Unsurprisingly income protection sales fell by 9.5% year-on-year in 20203. But we need to regain the momentum which delivered the year-on-year sales growth up to 2019.

Income protection is not the answer to all the financial challenges created by the coronavirus pandemic. It is, however, essential in making UK businesses, workers, and their families more financially resilient in the event of the unknown.

You matter more

Our latest “Let’s Talk Insurance” research can be found in our Adviser Knowledge Centre and provides you with 20 minutes of CPD learning.

If you would like to find out more about income protection from The Exeter, book an online product briefing with one of our sales team.