It’s become fashionable of late for income protection providers to create tool kits for advisers, to help them demonstrate the need for cover to clients. I’m not normally a fan of tools built by insurers or platforms, but in this case, this is money well spent.
Many advisers still find it hard to get clients to grasp the importance of prioritising protecting their income over other outgoings that give short-term gratification. A growing band of advisers are delivering simple messages making it clear protecting your income actually protects everything else from rent, mortgage payments, putting food on the table, saving in a pension, even lattes or lottery tickets, not all advisers are finding this easy.
Despite this, thousands of advisers who could better protect their client’s futures, if they gave more income protection advice are not taking advantage of this opportunity. This toolkit is designed to help those firms.
The “income first” toolkit has several components. First, an income risk calculator. I really like this tool, it takes the user through a very simple fact find capturing primary information, including occupation, details of the employer’s sick pay policy, savings, taxable income and typical outgoings.
From a single page input screen, the adviser can generate a six-page report. The first page plays back the client’s primary information and highlights the risk of them having an illness lasting various periods between 13 weeks and a year, as well as the risk of dying.
One flaw with the tool is that the pre-populated occupations seem to be a creation of the 20th, if not the 19th Century. Obvious occupations like software developer, social media manager or influencer are missing. This is probably down to the industry definitions standards, rather than The Exeter, but it highlights the need for an urgent update.
Page two shows the stark difference between their in-work income and what an individual would receive once any employer sick pay ends and they must fall back on statutory benefits. It then shows how this could be restored to cover their monthly outgoings using income protection cover.
The third page highlights how quickly an individual will fall into debt if their income ceases and they must rely on state benefits. Page 4 shows how income protection could bridge that gap and keep the client solvent. Page 5 plays back The Exeter’s claim stats and the most common causes of claims before moving to the final page which gives a range of premium options for two–year five–year and entire term benefit.
Anyone who has carried out a mortgage fact find should have all this information immediately to hand. Personally, I would be thinking about generating a report from the Exeter tool for every single mortgage client. But this shouldn’t just be about borrowers, renters need income protection to, arguably even more than borrowers as the restrictions on repossessions are now being lifted.
A “reasons why” editor is also provided to help Advisers create a suitability letter. Different letters can be created for both their Income One Plus and Pure Protection plus products. I do like this tool and I can see it being very helpful for advices, however it is designed around The Exeter products. In practice I would imagine most advisers would want to provide comparative quotes from a range of insurers. Consequently, while helpful in its current format I think there are a few extra elements that could be added.
The toolkit also has a wide range of documents under the “Essential Reading” section. These include the Society’s “Ill Prepared 2020” report, a study on the financial resilience of the self-employed, or rather the lack of it. If you need any convincing that there is a healthy market out there that needs help, this report must be read. Also, a series of Counter arguments to potential customer objections plus the usual adviser sales and income protection product guides.
The client engagement a proposed draft email can be downloaded together with a client guide.
Overall, this is a valuable addition to the resources available to advisers who want to grow their Income Protection business and in the current environment everyone should be looking to do that. Unless you are writing stacks of income protection business day in day out advisers should devour this toolkit and even if they are, I think the income risk calculator will be invaluable.
To view the toolkit, click here