AUTUMN 2025 www.paradigm.co.uk/protection PARADIGM PROTECTION NEWSLETTER
CONTENTS 4 Protection Market Update Paradigm Protect Mike Allison 8 Aviva Future Proofing Protection and our biggest Cover Upgrade yet 10 HSBC Life Why HSBC Life's new critical illness enhancements are worth knowing about… 12 L&G Holistic cover: Blending Income Protection and Critical Illness 14 LV= Protection Walking a mile in your client’s shoes
the ongoing challenge of energising the market. The responsibility to drive meaningful change continues to rest heavily on intermediaries, and advice remains a critical lever. As a distributor, we’re actively lobbying for support across several areas. However, progress in process development remain fairly stagnant. It could be argued that while current products are largely fit for purpose, they lack the flexibility and innovation needed to truly inspire market change. Could the upcoming FCA Review be the catalyst for change? Possibly—but any concrete shifts still seem a way off. In the meantime, here’s where we’re seeing some movement and interest… Inheritance Tax (IHT) Inheritance Tax (IHT) is quickly becoming one of the most talked-about topics in the IFA and Wealth Management space, with upcoming changes being the topic most on people’s lips. At Paradigm Protect, we’ve seen a certainly seen a significant percentage growth in Whole of Life (WOL) policy completions since the start of the year—reflecting growing concern among clients and advisers alike. Rumours around changes to Tax-Free Cash limits and the treatment of previously exempt Pension Funds are fuelling this interest. A recent article highlighted that pension withdrawals increased by 35.9% over the past year, amid concerns over IHT implications and potential changes to the 25% tax-free lump sum. The overall value of money being withdrawn from pension pots increased to £70.1bn in 2024/25, up from £52.2bn in 2023/24, according to data from the FCA. Indeed the FCA’s retirement income data found that in Mike Allison Director of Protection Paradigm Protect Protection Market Update 04 AUTUMN PROTECT NEWSLETTER Welcome to the latest edition of the Paradigm Protect Newsletter! This month, we’re bringing you a mix of insights and perspectives designed to inform and inspire. Among the highlights is a thought-provoking article from LV= on Income Protection, which offers a practical tip that could make a real difference for clients on benefits. This draws on our September webinar, when Carl Heard from LV= shared a compelling example: by arranging for LV= to pay a client’s Income Protection benefit directly to their lender, the client could retain a significantly larger portion of their monthly income. It’s a smart strategy that’s well worth exploring. Dive in to discover more! The Market – What’s Hot (and Not) in Protection Recent reinsurer stats show that the protection industry experienced modest year-on-year growth in Q1 2025, both in terms of Annual Premium Equivalent (APE) and number of policies sold. • Policies sold: Just over 531,000, up from 512,000 in Q1 2024 • Total APE: Reached £205 million, up from £196 million last year • Growth rates: 3.7% in policy volume and 4.6% in APE While these figures are encouraging, the growth remains relatively flat—highlighting
05 AUTUMN PROTECT NEWSLETTER Continued on next page... the six months to September 2024, when tax-free cash rumours were rife, 99,243 drawdown pots were accessed for tax-free cash (up from 84,132 in the previous six months). This figure then increased to 111,878 in the six months to March. These figures present a clear opportunity to engage clients in conversations around mitigating liability—whether through Life Products, gifting strategies, or Trusts. Under Consumer Duty, advisers have a responsibility to “avoid foreseeable harm.” With Claims Management Companies likely to scrutinise adviser actions in this space, proactive communication is key. Mortgage Brokers, too, are well-positioned to estimate estate values through their Fact Finds, making IHT planning more accessible than ever. The process may seem daunting, but in reality, it’s often simpler than expected. And don’t overlook the chance to discuss Frailty and Dementia Care—currently with just one mainstream provider offering a solution, it’s a niche but important area to explore with clients. Unemployment Cover In our previous Newsletter, we touched on the growing demand for Unemployment Cover amid the ongoing economic uncertainty. At the time, we mentioned that we had sourced a supplier to support you in this area. We’re pleased to share that Paymentshield has now extended their offering to include Accident, Sickness and Unemployment (ASU) cover—reinstating the option they provided pre-Covid. It can cover Accident and sickness or AS and Unemployment. There is no exclusion period, no Medical Underwriting and no loadings for lifestyle. Cover is available for self-employed and fixed term contracts, as long as it is written to cover a Mortgage they offer £3,000 per month or 75% of client Income. This makes it a great time to revisit their General Insurance (GI) proposition and explore the ASU cover available alongside it. General Insurance (GI) Buy-To-Let (B2L) GI isn’t often talked about, but with rising rental voids and arrears it is becoming increasingly important to look at how Insurance can support Landlords, especially in light of the upcoming Rental Reform Bill. As tenancies shift to become periodic, (month-to-month) instead of fixed-term, tenants will be able to give notice at any time. Rental voids are likely to increase further, reducing the certainty of a guaranteed rental income for landlords. In GI World it is hardly a surprise that BTL conversations are gaining momentum, and education around BTL and Landlord specific products like Rent Guarantee is trending. In addition we have seen Providers such as The Source and Paymentshield expanding their residential panels by adding new Insurers – helping them offer competitive premiums. Workplace absence and Income Protection In this edition L&G discuss the merits of Critical Illness v Income Protection and mention risk reality calculators to help quantify the likelihood of absence from work. Supporting this recent research shows that workplace absence levels in the UK have increased in the past year as more working adults face long-term health conditions. According to a survey of more than 1,100 employers: • UK employees were off sick for nearly two full working weeks (9.4 days) on average in the last 12 months, • Up from 2023 (7.8 days) and preCovid-19 levels (5.8 days).
06 AUTUMN PROTECT NEWSLETTER The top reasons for long-term absence, classified as four weeks or more, in the workplace were: • Mental health, such as depression or anxiety (41%); • Musculoskeletal injuries, such as back pain (31%); • Other long-term health conditions, such as cancer (30%). • Stress (28%) and • Acute medical conditions, such as stroke or heart attack (24%) We know that many clients haven’t the cash reserves to last even shortterm absences due to their financial commitments so this research stresses the importance of considering IP as part of the financial planning process. Whilst we have seen a significant increase in IP sales over the post Covid Years, it is still very much an “under sold” Product. In addition, by offering preventative care through easy-to-access health benefits that target the key drivers of absence, employees are able to seek support early, before symptoms escalate. Providing affordable and accessible care supports the opportunity to return to work faster giving benefits to Employee and Employer alike. Many Insurers now offer these on individual and Group Life policies, allowing 24/7 access – Another powerful way to demonstrate the value of your advice to clients to ensure they are protected against the unexpected. Potential Regulatory Changes Affecting Protection Advice You may have seen that the FCA is looking to simplify advice for clients involved in certain mortgage transactions. Their Mortgage Rule Review (DP25/2) outlines concerns that, while the market is functioning well, it may be too “cautious”— potentially limiting consumer access. The paper highlights how rising house prices, stagnant wages, and stricter affordability criteria are making home ownership an increasingly challenging aspiration, especially for those without family financial support. One of many areas they focus on is Product Transfers and the effective “dumbing down” of the need for advice at the end of a lending cycle. Effectively opening the door to removing the need for any advice whatsoever. This could lead to a dual pricing market forming (or re-forming) where Lenders can focus on more actively keeping the customers that Intermediaries pass to them without the need for a fee. Whilst many argue this is very much the case as it stands – at least the Intermediary has a choice and can proffer the advice on staying with the existing Lender. Whatever it’s arguments, the “unintended consequence” of doing this will be the removal of an opportunity for Intermediaries to discuss Protection at the time the PT is effectively due for “renewal”. At the recent Mortgage Senate, this proposal was discussed with the regulator present. The CEO of AMI strongly opposed the move, stressing the importance of maintaining advice—especially as a key moment to discuss Protection needs. We’ve lobbied for this to change. With the Protection Gap still growing, the last thing the industry needs is fewer opportunities to speak to clients—even if those conversations happen only every 2 or 5 years. We remain fully committed
07 AUTUMN PROTECT NEWSLETTER to supporting the intermediary market in growing Protection advice across our whole-of-market offering. The consultation closes on 19 September 2025, and we hope the regulator listens. Underwriting Helpline In our last Newsletter we introduced our partnership with the Insurance Surgery – a specialist firm, supporting our advisers with hard-to-place cases, adding to our already well supported underwriting helpline. In the first few months this has been a significant success prompting the firm to offer a higher proportion of their commission earnings back to firms. Here are some examples of how they can help for those of you who may have missed the promotion. They have access to underwriters who have a wide range of cover for “non standard” applicants, so it is certainly worth re-visiting clients where you felt the opportunity was lost Professional Indemnity Earlier in the Year we announced a new PI Insurance Partner – and again we have already seen some firms make significant savings. If your renewel is coming up, it is certainly worth taking a look. Events I would just want to give a shout out to our upcoming Events this year which continue to be a great source of information based of your feedback. Have a look at the schedule. Yet again Thanks for your continued support of our proposition – we are continuing to add to it to broaden the Products and Services to ensure we remain market-leaders in what we do.
Neil Carpenter, Trading Manager, Protection Distribution at Aviva, explores how advisers can overcome client objections by using empathy, insight and personalised tools to close the protection gap. In today’s uncertain world, protection is more than just a financial product, it’s peace of mind, resilience, and support during life’s challenges. Yet, despite its importance, a significant protection gap remains in the UK. According to the FCA Financial Lives 2024 Survey, just over half of the population (54%) still lack any type of protection insurance.* Across the industry, we all have a shared responsibility, not just to sell policies, but to educate, empathise, and empower clients. Understanding the rejectors Aviva’s research has identified several key customer segments that are more likely to reject protection. These include: • Young Families (30–45): Often lower earners or part-time workers, they may undervalue their role and see protection as non-essential. • Zillennials (25–30): Independent and carefree, they live in the moment and need early education on financial planning. • Anxious Uninformed (45–65): Financially stretched and overwhelmed, they need clarity and reassurance. • Family/Divorced (30–55): Often cynical or self-reliant, they require trust-building through relatable stories. Each group has unique mindsets and challenges, but they all share one thing in common: they need to see protection as relevant to their lives. Making protection personal One of the most powerful shifts in protection conversations comes when advisers start with the person, not the product. It’s about understanding where someone is in life, their fears, their goals, and their priorities. The LIFE model is a simple yet effective framework to guide these conversations: • L – Long-term: What are their aspirations for the future? • I – Income: How do they earn, and what would happen if that stopped? • F – Family: Who depends on them financially? • E – Enjoy: What do they love doing, and how would losing income affect that? By using open-ended questions and listening actively, you can uncover the emotional drivers behind financial decisions. This approach not only builds rapport but also helps clients articulate their own need for protection. Future proofing protection and our biggest cover upgrade yet Neil Carpenter Neil Carpenter, Trading Manager, Protection Distribution 08 AUTUMN PROTECT NEWSLETTER
The power of language Words matter. The language we use can either alienate or engage. Instead of focusing on “insurance” or “premiums,” talk about “legacy,” “peace of mind,” and “protecting memories.” One adviser put it perfectly: “My job isn’t just to protect income, it’s to protect futures.” Using emotive, relatable language helps clients connect the dots between their current lifestyle and the potential impact of life’s unexpected events. It’s not about fear, it’s about empowerment. The OPEN’D model: Revealing the need To guide clients from awareness to action, you could consider using the OPEN’D model: • Opportunity: What do they want for their family if something happens? • Problem: What risks or shortfalls could derail those plans? • Exploration: How would those problems affect their lifestyle and goals? • Need: What protection is required to safeguard their future? • Decide: Are they ready to take action? This model helps clients realise the importance of protection on their own terms, making the decision to proceed feel natural and necessary. Tools to support your conversations We’ve developed a suite of tools to help you bring protection to life: • Aviva cover stories: A national radio campaign featuring real-life stories from well-known personalities, designed to make protection feel relatable and relevant. • Interactive shield of protection: A visual tool that helps clients explore “what if” scenarios and understand the solutions available. • Selling protection guide: A step-by-step resource with conversation prompts, product brochures, and claims statistics to support your advice. These resources are designed to make your conversations more engaging, more effective, and ultimately more successful. From conversation to confidence: Let’s close the gap together Every conversation you have is an opportunity, not just to offer a product, but to provide peace of mind, build resilience, and make a lasting difference in someone’s life. By understanding your clients’ stories, speaking their language, and guiding them with empathy, you can help turn hesitation into confidence and rejection into protection. At Aviva, we’re here to support you every step of the way. Whether you’re looking for tools to spark meaningful conversations or insights to deepen your client relationships, our resources are designed to help you succeed. Find more support for your client protection conversation: Aviva Adviser: Personal Protection - Aviva *Source: FCA the Financial Lives 2024 Survey published 16/05/25 09 AUTUMN PROTECT NEWSLETTER
By HSBC Life Marketing Team Critical illness cover is there to provide a financial cushion for people facing some of the most difficult times in their lives. That’s why we’ve enhanced our Critical Illness offering with increased cover and payout for new customers. At HSBC Life we’re proud of our claims record and we want to be there when our policyholders need us the most. Since 1988, across all of our distribution channels, we have paid out over 15,500 critical illness claims, totalling £817m. In 2024 we paid out 94.44% of critical illness claims1. Our new enhancements will help us continue this strong track record. Why we’ve made changes We’ve listened to feedback from advisers and industry experts and following customer testing we’ve put together a series of meaningful policy enhancements that will mean we are there to financially assist people who are facing difficult health diagnoses. The CIExpert 2024 Critical Thinking Report explored what clients would really value when it comes to critical illness cover: • 45% of advisers said if clients received a payout immediately after being added to the NHS waiting list, their client would be more likely to buy critical illness cover • 60% of advisers said if additional/ severity payments were paid quickly enough to pay for private treatment, their client would be more likely to buy critical illness cover. So, what’s new? Top up payments (up to age 60) – CI Plus only Additional payouts that reflect the financial obligations of working-age clients. This offers an extra payment of up to £200,000 or the sum assured (whichever is lower) if a claim is made for one of nine listed conditions. Successful claimants could use the money for whatever they want, whether that is private treatment, to pay bills, home adaptations or to cross off bucket list experiences. Conditions covered include: 9 Blindness 9 Heart failure 9 Kidney failure 9 Liver failure 9 Major organ transplant 9 Motor Neurone Disease (MND) 9 Open heart surgery 9 Parkinson’s Disease 9 Traumatic brain injury 10 AUTUMN PROTECT NEWSLETTER Why HSBC Life's new critical illness enhancements are worth knowing about…
A key feature of this enhancement is the age range of up to 60 – this is competitive in comparison to other insurers who offer a similar feature up to age 552 – and recognises that traditional life milestones are often taking place later in life. It’s no longer unusual for people in their 50s to have a number of years left on their mortgage or young families or students to support. Enhanced critical illness definitions – CI Core and Plus We want it to be clearer what people are covered for and at the same time provide broader, improved cover. That’s why for both our CI Core and Plus products we’ve enhanced the definitions of conditions such as Blindness, Parkinson’s Disease and Less Advanced Prostate Cancer. For our CI Plus product we’ve also amended the Accidental Hospitalisation payout from £5,000 to £50,000 or 50% of the sum assured (whichever is lower). Pregnancy complications – CI Plus only We’re adding a new pregnancy complication condition to the Plus product, which will make a payment of £5,000 following a definite diagnosis by consultant obstetrician of one of the following seven conditions: • disseminated intravascular coagulation (DIC) • eclampsia • ectopic pregnancy • foetal death in utero after at least 20 weeks gestation, • hydatidiform mole • placental abruption • still birth after at least 24 weeks gestation. Every year in the UK, there are around 11,000 hospital admissions for losses due to ectopic pregnancies and 19,000 admissions for molar pregnancies, according to Tommys pregnancy and baby charity3. There were 2,612 stillbirths in 2023 and we’re not on track to achieve the previous government’s ambition of halving the 2010 11 AUTUMN PROTECT NEWSLETTER stillbirth rate to 2.6 stillbirths per 1,000 total births by 20254. A lump sum payment could provide valuable financial support at an incredibly difficult time, allowing claimants to fund time off work, private counselling or a break to recuperate. NHS waiting lists – CI Core and Plus NHS data shows that as of June 2025, there were around 6.23 million individual patients5 waiting for treatment on the NHS waiting list in England alone. The number of people waiting over 52 weeks stood at around 192,000. Customers can now claim when they are placed on the NHS waiting list for surgery for relevant conditions – they don’t have to wait for the surgery to actually take place. This gives claimants a wider range of options including paying for private surgery to get treatment sooner. You can see a full list of conditions covered here. What it means for advisers and their clients Our newly enhanced Critical Illness Plus policy is a stronger value proposition for potential clients. There for them when they need it most – offering them flexibility to deal with their situation in their own way with less pressure on paying the bills or getting back to work. To find out more, visit our dedicated CI webpage and register for a webinar. 1. From 1 January to 31 December 2024, HSBC Life (UK) paid out claims, accumulated across all its Life and Critical Illness products and distribution channels. 2. Internal market analysis carried out in August 2025 3. www.tommys.org/baby-loss-support/pregnancy-lossstatistics 4. www.gov.uk/register-stillbirth 5. https://www.bma.org.uk/advice-and-support/nhsdelivery-and-workforce/pressures/nhs-backlog-dataanalysis HSBC Life (UK) Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Our Financial Services Register number is 133435 and our registered office is at: 8 Canada Square, London E14 5HQ. Registered in England number 00088695. HSBC Life (UK) Limited is a member of the Association of British Insurers.
As an industry, we’re still advising on many more critical illness cover (CIC) policies than income protection (IP) plans. IP sales are on the up. But even so, Swiss Re reported that in 2023 almost 370,000 more CIC policies were sold than new IP. That’s still a significant gap. Despite these numbers, it’s really not as straightforward as one usually being a better fit than the other. In many cases, the two can go hand in hand to provide more holistic coverage. Weighing up the chances For a start, we just can’t know which product a client will need without a crystal ball. But tools can give us a good idea of their chances. Our ‘What are the Chances’ calculator tells us a 35-year-old non-smoking male has a: • 5.3% chance of dying before retirement age • 6.6% chance of suffering a critical illness or dying before retirement age • 35.7% chance of taking one month or longer off sick during this period of time. Covering the short and long term The lump sum payment from CIC is attractive to many clients. Tens or even hundreds of thousands of pounds can be paid out. But if your client never works again, how long would this actually last? It’s worth noting that only 19% of claimants actually use their CIC payouts to pay off some or all of their mortgage. Medical treatment, replacing income, health improvements and everyday expenses are more common areas these funds are spent. Assuming our 35-year-old client earns £60,000 a year – our IP could provide a maximum annual benefit of £36,000. With a standard retirement age of 67, the policy has the potential to pay for 32 years. That’s a staggering £1,152,000 worth of claims potential if needed. 12 AUTUMN PROTECT NEWSLETTER Dave Butler Market Development Manager L&G Retail Holistic cover: Blending Income Protection and Critical Illness
Covering a wide variety of scenarios Regardless, there’s no doubt that CIC can provide significant levels of coverage. But claims on common issues, like musculoskeletal or mental health conditions, often aren’t available. IP can cover this. And it’s worth thinking about, as in 2024, 38.8% of our IP claims were for skeletal conditions. In fact, a significant number of claims that clients will see accepted on IP plans, CIC just won’t cover. Case-by-case considerations Importantly though, every client is different. And when making the choice, there might be other benefits from work to consider, like death in service or sick pay. But sick pay usually only lasts a fixed period and won’t include bonus, commission or other benefits. Plus, there may also be previously purchased cover from a different adviser. No two clients are the same, so no two solutions should be either. Finding the right blend Choosing the right combination of cover is about taking into account their personal circumstances, employee benefits and existing cover. From there, you should highlight gaps in their arrangements and find solutions that give the most financial resilience to keep their plans and lifestyle on track. But in my experience, a blend of Critical Illness and Income Protection can be a very effective, holistic approach for many clients – covering the gaps to help protect them, whatever happens. If you’d like to find out more, why not visit our dedicated adviser hub. 13 AUTUMN PROTECT NEWSLETTER Legal & General Assurance Society Limited. Registered in England and Wales No. 00166055. Registered office: One Coleman Street, London, EC2R 5AA.
Have you ever stopped to think about what it means to “walk a mile in someone else’s shoes?” This phrase pops up in conversations, but do we grasp the depth of its message? It’s more than just a suggestion to consider someone else’s life. It’s about empathy, understanding, and stepping into another person’s world. However, do we think about the financial and emotional pressures during a client’s time of need? Like me, if you work within the Protection industry you will speak about the different products available to meet customers’ needs on a regular basis. How do we react when we hear about someone who is off work due to illness and as a result has lost their monthly income? Our initial reaction will often be…I hope they have Income Protection in place. Replacing most of their lost Income is undoubtably the key area of need. Walking in someone’s shoes At the start I mentioned putting yourself in someone else’s shoes. Let’s look at an example, based on one of our Income Protection claims we had at LV=. You work full-time, you’re married and have one daughter. Out of the blue you suffer a stroke and are left with limited movement in your arms and your speech has been badly impacted. The good news is you have Income Protection, however that won’t provide any monthly benefit until the 3-month deferred period has run its course. In these 3 months your husband needs to go back to work as the household can’t afford for him to be off work to look after you. The thought of receiving your IP benefit at some point soon is 100% better than not. However, all you want is life to get back to normal, or as close to it as possible. What if your IP plan gave you access Carl Heard National Account Manager, LV= 14 AUTUMN PROTECT NEWSLETTER Walking a mile in your client’s shoes
to immediate support, financially and emotionally? Imagine being in the above position and having access to: • One-to-one support and guidance from a dedicated claims handler. • Immediate back to work support (as early as during the deferred period) to help you get back to work quicker. Arranged and paid for by your protection provider. • 24/7 access to a remote GP and mental health support throughout your recovery and for as long as your policy is live. For many a successful Income Protection claim isn’t just about the tax-free income they will receive after their deferred period. It’s the additional support they have access to - before, during and after the claim begins. Thinking beyond the standard Income Protection claim When thinking of your clients’ circumstances, always pull out the Income Protection features that do and could benefit them in the future. Parent and child cover You are a parent with a daughter, and she is sadly diagnosed with Non-Hodgkin lymphoma. You want to take the time off to support your daughter and be there throughout her treatment. When speaking to your financial adviser, they remind you that your Income Protection policy includes parent and child cover. All situations are based on claims received by LV= This cover pays a lump sum out to parents if their child is diagnosed with a listed illness. After receiving medical evidence to confirm the diagnosis, you receive a payment of £25,000 for the family. This payment allows you and your partner to focus on what's most important – spending time together as a family. Pay my mortgage Imagine you are a new homeowner, and you have a mortgage of £250,000. Unfortunately, not long after signing up for your IP, you suffer a haemorrhage which eventually leads to an epilepsy diagnosis with chronic symptoms that leave you unable to go back to work as a caterer. When submitting your claim, your adviser notices you receive Universal Credit and reminds you that as part of your policy, you can use the pay my mortgage facility. This facility allows you to have all or some of your monthly Income Protection paid directly to your lender while protecting some or all of your Universal Credit income at the same time. Talk about the wider benefits of protection Now that you have walked in a few client’s shoes, you can make the most of your protection conversations by using this experience with your clients. Within LV’s Income Protection policy alone, we offer 4 potential claim opportunities through the various product features included. To find out more, contact your LV= account manager. 15 AUTUMN PROTECT NEWSLETTER
www.paradigm.co.uk/protection/ 0330 053 6061 [email protected]
RkJQdWJsaXNoZXIy MjI4MjU4NQ==