Instead, it may be more productive to use a pre-prepared set of neutral questions to get the client to realise for themselves how important protection could be. For example, advisers may want to start by asking how much the client’s monthly take-home pay is, followed by how much their monthly outgoings are.
From there, it will be important to determine whether the client has any savings, how much is saved and whether they would be willing to use these funds to support themselves, should they need to.
All of these questions can help an adviser guide their client to the realisation of how insulated – or not – they would be from financial hardship if they were unable to work for any reason.
Many clients simply do not believe they could find themselves in a scenario where they would be too ill to work, but that is why it is key for advisers to find ways to bring up the topic.
Strong interpersonal skills will be essential here, though, since advisers will need to read conversations with their clients very carefully in order to judge when it is the right time to bring up the idea of securing protection.
Coverage misconceptions
Many clients might think they do not need protection because they are employed. This is a potentially dangerous assumption and one that advisers can again address by asking their clients a few simple questions.
For example, in some cases, a client’s employer might provide some kind of income protection in the event of a long-term absence, but it is important to ask the client how long their employer does this for – and at what rate of pay?
Some employers might choose to pay an employee full pay for just a few weeks and then move to half pay, or even Statutory Sick Pay (SSP), which currently stands at £92.05 per week, the government website confirms.
The purpose of these questions is to make sure that the client truly understands their workplace benefits and whether, in the event they were signed off work, this provision would be enough to cover their financial liabilities.
A recent study by the TUC found that the UK’s sick pay benefits are actually quite weak when compared to other similar nations. The study found the UK had the second shortest duration (up to 28 weeks) of sickness benefit out of 16 comparable Western countries (where the duration was twice as long or more).
Meanwhile, the replacement rate – effectively the percentage of earnings a benefit replaces – was the lowest of any country at 13 per cent.
