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Income protection’s star rising as pandemic highlights threat – analysis

  • 06/10/2021
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Income protection’s star rising as pandemic highlights threat – analysis
Mortgage and protection advisers are seeing greater interest in income protection post-pandemic given a heightened awareness of health and financial risk.


Christopher Hall, mortgage broker at Mortgage Guardian, said his clients had been “more receptive” to this kind of insurance over the course of the pandemic. 

He said: “I think people are more open to this now. Whether this is a combination of a newer generation and the pandemic, I don’t know. Maybe there’s more education because people are reading about mortgages before they reach out to a broker and that highlights the need for all kinds of protection.” 

However, as mortgage clients are typically resistant to the idea of cover, Hall said it was still down to an adviser to raise the topic and get clients thinking about relevant policies. 

“Some clients will hear insurance, roll their eyes and say ‘here we go, here comes the hard sell’. Advisers see that and think clients aren’t interested so it becomes a toing and froing where there’s resistance on both sides,” he added. 

Hall said the pandemic had made it an easier topic to bring up, suggesting that if brokers presented all options correctly and early on in the mortgage process it would result in a sale.  

Pete Mugleston, managing director of Online Mortgage Advisor, also reported a “higher incidence of income protection enquiries” but noted it was  still sold by his advisers more than it was bought by clients. 

“It’s still rare to see mortgage customers calling in to buy specifically, but it certainly feels like a growing market,” he added. 

He agreed that clients were generally more receptive and put this down to a “perceived increased threat in the world” as well as a general wider focus on health and wellbeing. 

A rise in income protection interest was also noted by insurer LifeSearch. 

Emma Walker, chief marketing officer at the firm, said: “Since the pandemic we have certainly noticed an increase in enquiries for income protection. Most people tend to ask about life cover, which is the cheapest type of cover, and we all know critical illness cover outsells income protection by around five to one.  

“Income protection is usually something an adviser has to work hard to get clients to take an interest in, but the pandemic has made people less secure about their long-term income.” 

She noted that while critical illness payouts covered serious diagnosed illnesses, this did not extend to less serious health problems which could still prevent someone from working. 

Income protection also covers any medical reason that stops you from working, so overall it is often the cover most people should start with,” Walker added. 


Health cover drive 

Jonathan Clark, partner at Chadney Bulgin, said income protection would always be a “thorny subject” for brokers as the underwriting process was “so protracted and evasive” that by the time acceptance terms were produced many clients had forgotten the need for it.  

For this reason, he said the eventual take-up was usually poor.  

However, living through a global health crisis had resulted in clients actively seeking health and life cover. 

Clark said: “We’ve certainly seen an increased willingness for clients to explore their protection options, but from my recent experience, this still seems to be centred around pure life assurance. No client asks about income protection, and few even ask about life assurance – it’s still a subject that needs to be raised by the broker. 

“For many, the personal and very real experiences of recent bereavements or serious illnesses of family members or friends should focus people’s minds despite this, I’m still amazed that the majority of my clients just don’t believe that it will ever happen to them.” 

Mugleston said his firm had also seen a “significant increase in direct customer enquiries” for health cover and unlike income protection, this was less likely to be adviser-led. 

He added: “No doubt the resounding feeling here is the pressure on the NHS and concerns around growing wait times, cancelled appointments, and a higher risk of something going wrong. Those that could perhaps afford it but was less of a priority are now more interested in quotes than ever before.” 

Hall said while current events were encouraging clients to think about all kinds of protection now, it would always be the responsibility of advisers to keep reminding them of the importance of cover. 

“The pandemic has opened people’s eyes to different situations and advisers have been using that to bring up protection, but it’s up to brokers to keep people’s memory fresh or they will go back to the status quo,” he added. 


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