For many, ‘it won’t happen to me’ or ‘I’ll get by’ are two of the most common reasons why people do not want to invest in an IP policy.
Industry figures corroborate this. Critical illness protection is still more popular with advisers outstripping IP sales four to one. So why are advisers finding IP so difficult to recommend? And, how can the industry support them?
Earlier this year, we spoke with more than 800 advisers to find out what the barriers to selling IP were and what techniques worked best.
For many people, the reality of potentially losing their income needs to be spelt out. Can your client cover their mortgage or pay for their bills if they were sick or had an accident? To recommend the right amount of cover, most advisers will base it on their client’s salary and half will also recommend enough IP to cover outgoings. Interestingly, most advisers selling IP often introduce it alongside life insurance and critical illness cover. It seems that by talking about IP along with other more emotive types of insurance can actually help cement its importance in people’s minds.
We discovered that advisers who share provider tools with customers are more likely to sell IP than those who don’t. One in three will use shortfall calculators to show clients how their income would fall if they had to rely on state benefits alone. Budget planners also prove popular, calculating household spend and helping people appreciate how much they have to lose and highlighting why protecting their income is so important.
Yet despite implementing various tactics, advisers are still struggling to convince clients of the benefits and therefore recognise the importance of improving and expanding on their skillset to help them do this.
As providers of insurance products we need to be as clear and transparent as possible with our customers. Advisers play a vital role in educating clients on how best to protect themselves and it’s our responsibility to offer adequate support to the intermediary channel.
Nobody knows what the future will hold, but we can certainly prepare for it. Only by helping people make informed choices can we help soften the blow and make sure that the money is there when they need it the most.
LV’s free IP Summer School offers a flexible programme of CPD-credited webinar training to help advisers brush up on their income protection skills.