Stark choices underscore clients’ IP decisions

Michael Lindsey

Reading Rob May’s article on Income Protection (FA 1 September) raises some interesting issues. I totally agree with his arguments in favour of IP, such as:

* higher statistical probability than death

* insufficient state benefits whilst long-term ill

Article continues after advert

* need to protect mortgage/dependants

However, what he appears to have crucially overlooked is the finite level of people’s disposable income. In an Utopian world we would have all the protection products we need. But most of us are not so lucky and have to make difficult choices.

Just look at the vast array of ‘necessary’ products:

* house insurance (both buildings and contents)

* car insurance (often more than one vehicle)

* life assurance (both mortgage and non-mortgage linked)

* critical illness insurance

* private medical insurance (depending on your views)

* dental insurance

* travel insurance

* pet insurance

And this is before you even start considering any business-related protection needs or saving for retirement.

Clients often have to make stark choices because they simply cannot afford everything. And, despite receiving professional advice, these choices are often made emotively, irrationally and illogically, rather than driven by logical priorities or statistical probabilities.

Yes, by all means push the IP argument, but recognise that not everyone can have everything.

Michael Lindsey

Financial services examination writer

Leighton Buzzard,