Taskforce on the road to promote IP benefits

7 October 2010 | By Natalie Holt

The Income Protection Task Force is about to embark on a series of adviser roadshows aimed at boosting the take-up of income protection products.

Following a pilot with Savills and events with Aviva, Scottish Provident and Bright Grey, the IPTF is hosting the roadshows to explain the benefits of IP.

Five dates have been confirmed so far, with more to be announced shortly.

IP offers policyholders a tax-free income if they are unable to work due to illness or disability. Payments are adjusted to take into account state benefits and normally work out to be a maximum of 50 to 65 per cent of gross earnings.

IPTF co-chairman Clive Waller says: “The starting point for the roadshows is that CI outsells IP by a ratio of four to one. Advisers only selling CI assume that IP does not have the same pull for clients and there is a false assumption that a lump sum is better than an income. But there is no guarantee that the lump sum will be enough and how do you manage the lump sum when you do not know how long you are going to be ill for?”

Waller believes advisers need to communicate to clients the full impact of not being able to work. He says these include psychological factors such as stress, as well as the practical consequences of having to move to a cheaper area and moving children to different schools.
He adds that there is also a business argument for considering IP.

Waller says: “The RDR will change the game for IFAs and they are going to need more legs to their business. IP is a legitimate way of doing this as it fits in well with financial planning and is immune to market peaks and troughs, unlike investments.”

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