How income protection can help families

While helping the individual policyholder, it is also important that advisers and providers work together to consider the effect on the wider family - on school fees and whether protection policies might also cover children's illnesses should these arise.

Mr Clark says policy add-ons and support services attached to income protection and group income protection policies can be very valuable for families.

He says: "We pushed in 2016 to ensure there is more to income protection than the payout, although that is the most important element."

For example, British Friendly introduced elements to the standard policy, such as a death benefit which pays out a lump-sum if the policyholder dies, and care assistance benefit, which pays out when the partner or child of a member needs full-time care of 35 hours or more a week.

The knowledge he has cover to help him and his daughter should he ever fall ill has been of enormous benefit to him, and lifted a real weight off his shoulders.Meena Ibrahim

"These kind of support services are an important part of an income protection proposition, and especially valuable to those who have dependents", he says.

Support services

Katharine Moxham, spokesman for Group Risk Development (Grid), agrees: "Group income protection products provide a financial lifeline after an extraordinary life-changing event, and support people in many ways.

"The extra support services that come with a group income protection policy can be effective in keeping people in the workplace, giving them the help they need to make life changes, while supporting them back to work."

"It's not just about the payout", says Jennifer Gilchrist, protection proposition design at Royal London. "It's about showing how the right level of support can help people get back to work."

For example, counselling as part of the policy can help the individual emotionally and mentally - 'unseen' consequences that can have an effect on the whole family.

Royal London's Helping Hand service offers counselling, helpline services and provides ways to help people recover and get back to work, so they can support their families.

As Ms Gilchrist comments: "If family members are struggling to cope with the emotional impact of a spouse's or parent's condition, they can also receive support from Helping Hand."

Canada Life provides an early intervention service, which can help as outlined in the case study below, when family and work life both get too much.

Financial wellbeing

Primarily, in addition to the support and rehabilitation services, income protection helps people provide for their families.

Andy Simmons, senior income protection specialist at Vitality Life, explains: "People often consider life insurance to leave something behind if they die, but it is less likely they will consider how to provide for their family if they are too ill to work.

"This is where the financial adviser is so important, as income protection can be used to make sure the whole family is protected if the breadwinner cannot earn a salary either for a few weeks or longer term, potentially until retirement."

Grid's Ms Moxham adds: "No matter what salary is at stake, it is vital people can protect their household financial position, which is so key to continued personal wellbeing."

Protecting the household is paramount for Steve Bryan, director of intermediary for Legal & General, who says: "By having an income protection plan in place, if one of the main earners of the household unexpectedly becomes unwell, families will be provided with peace of mind that the impact of the loss of income will be mitigated.

"Without this form of protection in place, the daily running of the household can become a financial burden and a constant source of worry."

The former Centre for Economic and Social Inclusion (which merged in January 2016 with the National Institute of Adult Continuing Education), carried out a study in 2014 which showed there are 10.8 million middle-income households in the UK that would be entitled to relatively little or no state support if the main earner had to stop work.

As Royal London's Ms Gilchrist comments: "These households would see their income drop substantially if they were to rely on state support alone as their income safety net."

Houseperson's benefit

For Jeff Woods, business development director at Sesame Bankhall Group, another way advisers can offer significant value to clients is by discussing houseperson's cover. 

If one family member is working and the other is not, or has stopped work to look after young children, Mr Woods suggests that taking out houseperson's cover could help provide support for that individual should they become ill.

He explains: "Houseperson's benefit could provide an income of £1,000 a month to help cover the costs of running a home.

"In most instances, the main breadwinner has no option but to continue to work and this money could help pay for a housekeeper or childcare in the event the houseperson is too ill to undertake their usual daily activities."

Even if the houseperson has no cover, it is worth the main breadwinner having their own policy in place should the worst happen to their partner.

This happened to a client of Meena Ibrahim, independent protection adviser at Drewberry. She says: "Many of our clients are looking for peace of mind. 

"One of my clients, Paul Pantony, became a single father to his daughter, when his partner of 21 years passed away. 

"For him, income protection was important. The knowledge he has cover to help him and his daughter should he ever fall ill has been of enormous benefit to him, and lifted a real weight off his shoulders."

To read Paul's full story, visit the Drewberry case study page here. 

simoney.kyriakou@ft.com