18 PROTECTION TOMORROW
September 20th to 24th marked the UK ’ s first ever Income Protection Awareness Week , created and led by the Income Protection Task Force ( IPTF ). It was a fantastic week of content and great to see an event solely dedicated to income protection ( IP ), a product that is woefully underutilised and undersold .
Stacy Reeve
Senior Policy Adviser AMI
Stacy Reeve is a Senior Policy Adviser at the Association of Mortgage Intermediaries ( AMI ). A key part of her role is focussed on protection and GI . Prior to joining AMI in 2019 , Stacy was an insurance broker at Howdens and has over nine years ’ experience in the financial services industry .
As of February 2020 , 6 % of UK adults held IP . Or for anyone that prefers the glasshalf-empty approach , that ’ s 94 % of UK adults that don ’ t have it . When you consider that the same percentage ( 6 %) hold gadget insurance [ 1 ] , is this an indicator of where , as a nation , our priorities lie ? Do we really value our tablets and smart watches more than ourselves ?
Last year , AMI found that 59 % of UK adults said it was important to hold income protection cover [ 2 ] , highlighting consumers do appreciate and value the concept of IP . In my view , the low take-up is down to a lack of awareness amongst consumers around how IP works and what use it will be to them , rather than a deliberate prioritisation of other insurances .
Positioning of IP
Advisers play a crucial role in helping bring to life what IP is all about and what the reality could look like for a customer should they lose their income and have no means to replace it . This starts with how income protection is positioned as part of the mortgage journey . As Martin Reynolds , Chief Executive of SimplyBiz Mortgages , commented during Income Protection Awareness Week ’ s mortgage session , whilst a client will be excited about buying a home , an adviser ’ s message to the client should always be clear : “ We ’ re going to help you stay in this home ”. This is a powerful statement as it signals to the customer that a conversation about IP isn ’ t just about protecting their monthly income but goes much deeper than this .
This statement also lends itself to a much more emotive conversation about IP . Not protecting income could hamper the customer ’ s future goals , their aspirations and potentially undo all the hard work that has allowed them to be in a position to buy a home . First-time buyers are unlikely to want to live with their parents again after years of saving up to finally call a place their own . Parents will want to avoid disruption to their children ’ s lives if sickness or an accident forces them to move out of the area and change schools because they can no longer afford their