Income Protection 

Advisers are focusing too much on price

Advisers are focusing too much on price

Advisers focus too much on price and terms when selling group income protection rather than the "merits" of a provider or its value added services, according to Canada Life’s marketing director Paul Avis.

In light of mental health awareness week (May 13 - 19), Mr Avis said more should be done to promote group income protection as an invaluable benefit to every employee that suffers from either mental health concerns or conditions.

Group income protection policies often include quick access to counselling and GP services as well as second medical opinions and get back to work schemes.

But Mr Avis said such services were under-used and under-promoted.

He said: "These services should be used by advisers as the key selling point of group income protection.

"Early intervention services not only help the employee to get back to work faster, but they are particularly useful for managers as they are helpful for illnesses or conditions that are harder to see and understand, such as stress or other mental health issues."

Mr Avis quoted group claim stats, published last month, that showed only 3,551 policy holders used these services to return to the workplace before claiming in 2018, out of the 2.5m people covered under a group income protection scheme.

He said Canada Life had found 95 per cent of people who used early intervention services did not become claimants and were back in work normally within 5-7 weeks.

Last week, Legal & General stated about two thirds of claimants who returned to work using its rehabilitation services did so before having to claim on their group income protection policy.

According to research from protection provider Aegon, advisers felt value-added services helped support conversations about the cost of protection with corporate clients.

More than half of the 100 advisers polled in January said these services made clients more receptive to the policy, especially medical services, counselling and wellbeing benefits.

Simon Jacobs, head of claims and underwriting at Aegon, said: "Support services come into their own at a time when customers need them most and their value is very clear. But that’s only one aspect of having access to these services.

"There’s a move away from price being a leading factor when recommending a policy, with advisers increasingly saying clients are more receptive to protection if support services are included."

But protection adviser Alan Lakey, director at Highclere Financial, said although he agreed that value added services were under-promoted by advisers, this was primarily because the cost of the policy and the payout rate were more important to clients — particularly corporate — than these benefits.

He said: "When you speak about these issues, you're limited by the conversation you're bound to have about cost and payout rates and the different payout methods.

"You will be stopped by the fact that the income payout is sometimes only 40 per cent or so of the income and you may be dealing with an employee of the firm who has been tasked to find the cheapest deal."