Tom Conner, Director at Drewberry Insurance, says: “It is important as an adviser to know when an insurer receives protection business it will follow through on its promises. Long-term paid claim statistics are a useful tool to demonstrate that income protection policies consistently pay out, and that insurers are not trying to decline every claim, which is how the public often perceives them.”
3. Occupation class importance.
One of the most crucial aspects of income protection, and a point that can never be made too often, is making sure your client understands which occupation class they are being covered under.
Own occupation income protection policies are by far the most comprehensive and easy to claim on. They effectively cover you for being unable to do your own job. Often people can mistake inferior cover offering a cheaper premium as like-for-like cover with an own occupation policy.
Other types of occupation classes include any occupation (where you have to be unable to do any job to claim), and activities of daily work/living (where you have to be unable to perform a number of tasks from a set list).
This point is so important that intermediary LifeSearch has announced it is committed to never recommending an income protection policy to its customers that doesn’t offer own occupation cover. Friendly Societies in particular often only sell policies on an own occupation basis, and many insurers are moving to this position.
4. Is critical illness cover better for cancer?
Cancer is arguably the disease people worry about the most. The financial risk associated with having cancer is most often addressed through the recommendation of critical Illness cover.
However, while critical illness cover offers a lump sum payment to help ease the financial burden of such illnesses, people can be left unable to work for many years. Macmillan Cancer Support figures show that four in five people are on average £570 a month worse off than before they were diagnosed with cancer.
This shows there is real benefit in weighing up whether an income protection policy could be more appropriate for some clients in addressing the financial impact of cancer.
5. Age is just a number.
Young people often feel that being seriously ill is something that either won’t happen to them or is something to worry about later in life. But we know that long-term illness can strike at any age, and making sure an income is protected can be as important at age 20 as it is at 60.
