Opportunities for protection

What does owning your own home mean to you? As a nation we are obsessed with buying our own home, so it is not encouraging news to hear latest reports telling us that the average age of a first-time buyer could be 40 by the end of the decade.

Also the amount of people renting property could overtake homeowners in 15 years. A shortage of affordable housing, hefty deposits and stricter rules on lending mean that the dream of owning property before the age of 40 could remain just that – a dream – for many people.

Reaching certain milestones such as becoming a homeowner has always been one of the key triggers for people to recognise the need for financial protection. Therefore what will these predictions mean for the protection industry? Does a further slowdown in the mortgage market mean a slowdown in protection sales? Well, it certainly does not have to. The opportunities to sell protection are still there. Just because a person does not have a mortgage does not mean that they will not need critical illness cover, income protection or, if they have dependents, life cover. People are still getting married, they are still having children and they still have bills and rent to pay. If they suffer a serious illness and are unable to work, they will still suffer the same financial hardships as a homeowner.

While life insurance may not be as appropriate for someone who does not have a mortgage or dependents, critical illness cover or income protection is. The benefits of flexible menu plans mean that the amount of cover can be increased or more covers added whenever circumstances change. This also gives advisers the opportunity to revisit existing clients, review their needs and help to build up a long-lasting relationship.

Encouraging younger people to take out protection insurance will be challenging, but there are convincing arguments for doing so. If they understand that the younger they start a policy the cheaper it is, they may be more inclined to see the benefits. Being struck down with a serious illness does not just happen in middle age. It can happen to anyone at any time as Bright Grey’s claim statistics show. With the youngest claimant for cancer just 28 years old and the youngest heart attack victim only 35 years old, where a critical illness is concerned there is no discrimination.

This is also consistent with a US report which stated that in the past 10 years stroke rates had increased 37 per cent in patients between 35 and 44. People usually associate strokes with older people, but one-quarter of all strokes happen to people of working age. It is statistics like these that will help to convince people of the very real need for financial protection. It is also important to make people aware that the longer they put off buying protection they may find health problems emerging that could make the policy unaffordable or they may be refused insurance altogether.