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Income Protection Task Force develops tool to measure client need for IP

The Income Protection Task Force is developing an application which aims to quantify a client’s need for income protection, taking into account state benefits.

The IPTF, set up to raise awareness of IP, last week launched its Signposts for Income Protection paper, which sets out a range of initiatives designed to boost IP take-up.

The IPTF estimates there are between 12 and 15 million consumers who have a “clear, identifiable need” for IP. Speaking at the launch event of the research in London last week, IPTF chairman Peter Le Beau said the research represented a significant step for an industry that has “heard a lot of talk but seen little action.”

IPTF executive committee member Nick Kirwan, former Association of British Insurers assistant director, also outlined plans for an app which aims to establish a client’s need to buy IP.

The app, still under development, allows advisers to input a client’s personal details including household income, number of dependents, mortgage or rental payments and other expenses.

The app will also try to factor in any state benefits that a client may be eligible for, though some at the event questioned whether this was achievable.

LifeSearch chief executive Tom Baigrie says: “The challenge for advisers is not so much about whether or not IP claimants might lose state benefits as a result, but that state benefits are far too unpredictable for that to be a factor.

“Everyone needs IP over and above state benefits – with very few exceptions. The benefits system is far too complicated and unpredictable – it needs to be made much clearer so people are aware of what they are entitled to and what they need.”

The IPTF is also aiming to raise the profile of IP through its Family Support Initiative, which will follow a number of families where the breadwinner has suffered a serious illness or accident. The families will be supported by a donation, equivalent to a year’s salary of close to the national average, from a trust made up of donations from providers and reinsurers. The IPTF is in talks with production companies to create a TV series.

The task force has also compiled its income protection charter, which encourages advisers to highlight potential vulnerability in clients’ financial circumstances, make clear distinctions IP and payment protection insurance, and ensure proper after-sales care. 

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  1. Tom Baigrie is spot on there, you’d have to model in the probability of getting into the ESA support group etc. The resulting probability of getting all the available benefits would likely be so small that the only logical method of gaining reliable protection would be through insurance. If we looked at the ESA support group acceptance rate like an insurance payout rate it’d probably be the worst product on the market!

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