Reinforcing the value of income protection to clients
View employer-paid sick pay entitlement as an opportunity not an obstacle to individual IP, says protection adviser at Plus Protect, Matthew Chapman
In my experience, one of the most common objections to taking out Income Protection is the client's misguided notion that their sick pay will be enough to support them during any period of incapacity.
If we ignore those with little or no sick pay at all (and who desperately need Income Protection) and instead focus on those who do receive reasonable sick pay entitlement - such as NHS workers, teachers and other public sector employees - in the past, this may have presented you with a challenge to overcome.
Well, not anymore.
In this article, I am going to demonstrate how to turn your client's long sick pay entitlement, from a potential objection, into a positive way of reinforcing the value of Income Protection.
Rather than assuming a client's lengthy sick pay entitlement represents an immediate barrier to your preferred IP recommendation, consider how this actually provides the perfect tool to get your client instantly more engaged in it.
Longer sick pay equals cheaper premiums
If you are confronted with a client who receives substantial sick pay through work, start by applauding them for being lucky enough to have such fantastic benefits in place.
Explain to them how this lengthy sick pay entitlement affords them access to Full Term Income Protection cover at more favourable rates than for most other policyholders.
At this point, describe how the waiting period, between when a claim is submitted and the benefit payments commence, has a direct influence on the cost of their cover.
The fact that they receive considerable sick pay through work simply means that they can afford to delay their benefit payments, thereby making their cover far more cost-effective than for most people.
Highlight to your client that their sick pay benefit is something that they should use, that they should leverage and that they should take advantage of, to obtain Full Term cover for a much cheaper premium than those who have little or no sick pay.
I often use the example of a Self-Employed tradesman, who works in a high-risk profession and who would need the cover to begin almost instantly, as comparison.
In addition to the potential cost savings, you should take this opportunity to remind your client that the average Income Protection claim lasts for 7 years, further highlighting the importance of Full-Term cover.
Using the law of averages - even the most fortunate of clients, such as those with a 12-month sick pay benefit - remain massively exposed without cover beyond their workplace entitlement.
For NHS workers, surgeons and teachers, you can also signpost those products and providers who go one step further by allowing the client to arrange cover on a 12-month deferred basis yet honouring whatever stepped sick pay entitlement the policyholder receives at the time of claim.
Try to change your mindset and instead approach your client's sick pay entitlement, not as a possible objection, but as the very means by which you can add greater value to your IP recommendation.