According to Neil Galjaard, insurance director at Paymentshield, houses are repossessed every 14 minutes in the UK, and less than 50% of the population has enough money to fall back on.
“It’s a sad reality, but one that will be more prominent as the spending cuts loom. That’s why it is more essential than ever for people to get income protection for them to ensure some security on their homes,” said Galjaard.
He added that the protection gap is widening, with lenders selling less Payment Protection Insurance (PPI) on loans, with Mortgage Payment Protection Insurance heading in the same direction
“Government policy is to reduce the level of support and facilitate more private provision,” he said
“What intermediaries need to understand is that there is a market out there for income protection, because there is a real need out there for the customer
However, the product needs to evolve, he told intermediaries.
Galjaard suggested providing short-term income protection with a risk-adjusted premium, or annually renewable, has clear terms and conditions and has built in benefits Galjaard added: “In order to encourage more people to take out income protection, we have to restore confidence in the product again.”
