11th June 2015

Bright Grey – Income Protection. The forgotten cover

I joined the world of financial services almost 14 years ago when I was recruited as part of the team that would set up Bright Grey.  In that time, we’ve seen a lot of change, some of it good, some of it bad.  But one thing that never changes is the client’s need for adequate protection cover. Regardless of what the economy does or who’s calling the shots, people will still face the same risks to their income.  So why, 14 years later, are we still pondering over the same huge protection gap?  And why is income protection still the forgotten cover?

In days of old, life cover was sold because dying prematurely was a high risk.  Today we die more slowly.  This might be harsh but it’s absolutely true.  Five-year survival rates for most cancers have improved substantially, strokes can be stopped if caught quickly enough and heart disease management has improved.  And that’s before we consider the medical and technology advances that help people pull though the worst of accidents. It’s all good news. But the reality of living through survival without adequate financial support could be a nightmare. 

Long-term illness or injury can mean an extended period of absence from work and not everyone has a generous employer.  For some, breaking a leg could be enough to break the bank.  Legal and General’s Deadline to the Breadline research supports this.  It states that on average homeowners with a mortgage would be on the breadline in just 22 days¹ if income was interrupted.  So without enough of the right cover, some families could be facing financial disaster very quickly. How would your clients be placed?

It’s always struck me as odd that people insure their things but not themselves – especially when they have a family to take care of.  It points to a lack of awareness of the risks they face.  That lack of awareness could help explain the upside down world we live in when the boiler is often insured against breakdown but the breadwinner isn’t.  As an industry we’re definitely working toward changing that.  

The 7 Families campaign, which Bright Grey is proud to support, has done a fantastic job of bringing to life the benefits of having protection in place when things go wrong.  Watching the struggles each family is facing highlights the many needs people have when illness or injury strike.  And despite an industry that focuses largely on covering the mortgage, it’s clear to see that for most, day-to-day living expenses and the ability to buy expertise, support and specialist equipment are the priorities.  Paying off the mortgage would be lovely.  But with so many demands on income, and limited While the 7 Families campaign has started to create some impetus around income protection, we still have a long way to go.  Latest figures from Mintel suggest that just 9%² of working families have any income protection in place (total working families surveyed 1,229).  That means 91% don’t.   The reasons for such low uptake are broad and varied, but advisers and providers have an opportunity to address some of the reasons clients don’t buy enough of the right cover.

We’ve seen strong support for income protection in the industry and we believe this change starts with advisers. Perhaps because they’re often the only people who will ever speak to clients about their protection needs.  We know it’s not easy to do and that reluctant clients are just one of the barriers to protection.   The good news is that providers don’t only provide the products but a range of tools and sales aids to help you recommend them.  It’s worth spending time to find the tools that suit you.  It could help you put more of the right cover in place for your clients.

I mentioned earlier in this piece the range of needs and expenses a family faces when injury or illness strike and how 7 Families is helping to highlight this.  When we set up Bright Grey all those years ago we wanted to make a real difference to people who found themselves in exactly that position.  It’s why, right from the very beginning, we included our Helping Hand service with all our menu plans.  And it’s why, 12 years after launching Bright Grey, it’s still there and still growing to meet the needs of your clients.   As well as personalised, expert support from specialist nurses and access to specialist equipment and therapies, our Helping Hand service now includes a second medical opinion service.   

The films on the 7 Families website can help you demonstrate the very real need for enough of the right cover should things go wrong.  We also offer a range of client case studies on film and paper that can help you explain the value of our Helping Hand service.  These are real people telling their stories.  What better way to highlight the need for comprehensive, tailored protection solutions that include income protection? 

No matter what age you are or how healthy you think you are, life has a way of proving you wrong.  And that’s why more clients need more of the right protection.  Your advice really can make a difference. 

 Sources:

1. Legal and General Deadline to the Breadline report, November 2014.
2. Mintel Income Protection UK, February 2015.

Author: Denise Wond, Marketing Manager

Adviser Letter of the Week, Protection