Tackling objections to income protection cover

He says common objections to taking out income protection are:

1) high perceived cost;

2) a belief that it won’t happen to them;

3) other financial priorities;

4) a lack of awareness of the risks; and

5) lack of understanding of the consequences of not having cover.

By asking open questions, Mr Hamilton says the adviser can help the client discover their own needs and wants.

Mr Hamilton says: “The more the customer considers the issues they themselves have raised, and the impact on them and their family, the more important they will become.

“Examples of open questions are, ‘What would happen if…? ‘What would you like to happen if..?’ ‘How would you cope if…?’”

Unless the client gets income protection through their employer, which is only a minority of the working population, Kevin Russ, technical manager of Friends Life Individual Protection, says some personal income protection cover is vital.

Dougy Grant, protection director of Aegon UK, says a fact find should establish if there are any existing policies, possibly provided with an employer, or any alternative income streams.

Typically, Mr Grant says the client may say they can’t afford the cost of the cover. The challenge is to get the client to realise can they afford not to have income protection cover - and in any case, clients are often misguided about the true cost of protection.

As an example, Kevin Carr has cited the average premium a customer of protection specialist LifeSearch pays is just £26 a month, a lot less than people presume cover costs.

Mr Grant says advisers should ask their clients to write down their main outgoings; mortgage, loans, credit cards, utility bills, clothes, consumables. Advisers should check how much do they pay out per month and where would that money would come from to meet these bills.

Adviser feedback to LV also makes it clear one of the main barriers intermediaries face when discussing income protection with their clients is they are more interested in growing their wealth than protecting it.

Regardless of whether a client has a family or owns their home, Martin Sincup, income protection manager of LV, says advisers need to stress that income protection should be considered as the policy that can safeguard their current lifestyle if they were off work for a long period of time.

Statistically Mr Sincup says a client is more likely to suffer an illness which prevents them from working for two months or more than to die before they retire.

Mr Sincup says advisers can use LV’s risk reality calculator to demonstrate the importance of income protection to clients.

For example, he says a 30-year-old non-smoking male would have four times the risk of being off work for two months or more, or twice the risk of suffering a serious illness compared to the risk of dying before 65 years.

Mr Sincup says the calculator is designed to illustrate the real risks a client faces in order to move the conversation about protection away from price, towards individual needs.