Income Protection 

Guide to the background to protection planning

  • Describe what types of financial shocks income protection can cover.
  • Identify how state benefits and IP interact and how advisers can help clients understand the IP claims process.
  • List how the income protection market might develop over the next few years, including whether it will consolidate.
CPD
Approx.60min
Guide to the background to protection planning
What advisers need to know about income protection to help clients build financial resilience
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Advisers' clients should be prepared for the unexpected - for instance, those income shocks that most people will experience and which can leave them financially worse off, even if only for a short period.

But the truth is, many people are not good at talking about these types of life scenarios, including unemployment and illness.

Justin Harper, head of marketing at LV, explains: "There’s a double whammy - not only are people generally not interested in facing up to the prospect of an income shock, but as a nation we’re poorly prepared for them too.

"This financial fragility is highlighted in the latest LV Income Roulette Report. For example, only 27 per cent of people in their early 30s said they had more than the Money Advice Service (MAS) recommended level of savings (three months' outgoings in accessible savings)."

This guide, which is worth an indicative 60 minutes of CPD and can be read by clicking in the image above, asks what kind of life and income shocks might clients be vulnerable to and how can income protection help in these instances?

It also considers what advisers need to know about how the state benefit system works alongside IP and what clients should know about the claims process.

Finally, this guide in association with LV, will ask, how is the income protection market set to develop in the next 5 to 10 years? 

Contributors to this guide: Justin Harper, head of marketing at LV; Rob Harvey, head of protection advice at Drewberry; Roy McLoughlin, associate director of Cavendish Ware; Jon Dean, head of retirement strategy at Altus Consulting; Peter Hamilton, head of market management at Zurich; Vincent O'Connor, senior business development manager at Royal London; Paul Foody, chief operating officer of Inchora Group; Rod Jones, head of partnerships at ActiveQuote; Kathryn Knowles, managing director of Cura Financial Services; Emma Thomson, product strategist at British Friendly; Craig Brown, director and general intermediary at Legal & General; Steve Bryan, director of distribution and marketing at The Exeter; Garry Webb, head of operations and independent financial adviser at Roxburgh Financial Management; Alan Lakey, founder of CI Expert; New Policy Institute; Zurich UK.

Features written by Saloni Sardana and Victoria Ticha, features writers at FTAdviser and Financial Adviser

CPD
Approx.60min
  1. According to Mr Harvey, there are four big life and income shocks clients are vulnerable to. Which is the odd one out?

  2. Mr O'Connor says: "Redundancy cover is available within the market, but this is usually a separate insurance that can be taken out – not part of an income [protection plan] cover.” True or false?

  3. Mr Harvey says the media often perpetuates the myth about state benefits that they are what?

  4. The average monthly mortgage payment is how much, says Mr Harper?

  5. Generally, claims processing delays are caused by waiting for a response from who?

  6. Mr Webb predicts IP will do what in the next decade?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe what types of financial shocks income protection can cover.
  • Identify how state benefits and IP interact and how advisers can help clients understand the IP claims process.
  • List how the income protection market might develop over the next few years, including whether it will consolidate.

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