17 WINTER PROTECT NEWSLETTER advisers, and important work by the Income Protection Taskforce may be coming to fruition. So what do we predict for the future? In the past, when we’ve wanted to improve our understanding of the protection market including product design, we’ve asked advisers’ views. That can be in our everyday contacts and with regular surveys. It also helps to examine the profile of the business placed with Guardian and of course combining this with the big sector-wide surveys, such as that done by Swiss Re, and quoted above, although we do have to remember they tell us about last year with its very high inflation, rather than now. What our own data is showing To date, nearly 60% of Income Protection was recommended alongside other covers, with the balance sold stand-alone². Out of those sold as a menu, unsurprisingly, more than half (51%) was sold with life cover. Something we call ‘the Dynamic Duo’! However, to re-emphasise the point that it’s not always ‘either/or’, almost a third of Income Protection is being sold alongside Critical Illness Protection or Combined Life and Critical Illness Protection. Another interesting and, we think, encouraging statistic is that Income Protection with Children’s Critical Illness Protection made up a healthy proportion of sales where Income Protection was sold along with something else. So what can we conclude about the mix going forward? In very general terms, what I think we can see beneath the ‘more income protection trend’ is a lot of considered advice carefully attuned to client’s needs, attitudes and indeed budgets all being met by a mix of covers. Then stand-alone may be meeting a specific financial planning need or simply be the preferred means of insuring mortgage payments, for example. We also hope that within this, various features of the products within our own menu are also helping make the case for an intelligent blend, whether it’s choosing between our 2 different life covers for different budgets, or factoring in that we have Premium Waiver as standard and which kicks in after 28 days with Income Protection regardless of the deferred period, Payout Planner with life cover and our cover upgrade promise on critical illness cover. We welcome your views Yet we have set ourselves a little task and indeed hope advisers will help. Rather than just taking the increase in income protection sales as read and moving on, it would be great to understand why advisers think it is happening and any further implications. We’ll be asking advisers for their views in the coming months including why and whether they think the trend will continue, and whether income protection might even overtake critical illness cover as the main additional cover to life covers in a ‘Dynamic Duo’ protection recommendation. Our experience in these years of significant turmoil is that if you can create a kind of 3D view of what is happening, then the better you can position yourself to meet customer demands and customer needs in future. Sources: 1. Swiss Re, Term & Health Watch 2024. 2. Guardian sales data from the launch of our income protection on 3 April 2023 - 20 September 2024. Guardian Financial Services Limited is an appointed representative of Scottish Friendly Assurance Society Limited. All products are provided by Scottish Friendly.
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