A report from the Association of Mortgage Intermediaries (AMI) called Protection: Moving Forward confirmed 40 per cent of 18-34s say they would consider income protection as a result of Covid-19 where they might not have before – twice as many as those in the 35 to 54 age bracket and ten times higher than the over 55s.
The poll of 5,000 consumers and 250 mortgage brokers supported by Legal and General and Royal London also showed 18 to 34 year olds think income protection is just as important as buildings insurance.
The research also showed over half of protection discussions have increased and one in four of those advisers are referring to a protection specialist, up from one in seven last year. Of those asked, 99 per cent of advisers are now raising protection with their clients when discussing mortgages and a quarter are passing them onto protection specialists.
The question of cash
Contrary to popular belief, cost isn’t the main reason consumers don’t buy protection from their broker – most don’t think they need it. However, where 99 per cent of advisers say they raise protection, up to two thirds of clients don’t remember discussing it.
Julie Scott, chief commercial officer at Royal London, said: “It’s motivating to see that nearly two thirds of the mortgage advisers surveyed have noticed an increase in their protection business since the start of the pandemic.
“This has created awareness of vulnerability in society, particularly in relation to health. Consumers now understand that a life shock can happen out of the blue.”
On the optimal time to raise the protection discussion when in front of the client, 30 per cent of advisers raise it at a specific point during the interview where 70 per cent don’t formalise the process.
Emma Walker, chief marketing officer from Lifesearch, said: “It is interesting that brokers choose to raise protection at different points in the advice process and that there is no obvious method that is more successful. Perhaps the most important issue is ‘what’ is said, rather than ‘when’ it is said.”
It appears that context for the conversation also remains key.
Stacy Reeve, senior policy adviser, AMI said: “Our research shows that those advising on a mortgage are in the ideal position to raise protection – for consumers that bought protection cover, a new house purchase was the top trigger for all protection products. So why have such a small percentage of consumers purchased protection insurance via their mortgage adviser given their role in facilitating the house purchase?”