Income Protection: More Than Just Insurance

Figures show that income protection (IP) sales are healthy. In fact, according to data released by the Financial Conduct Authority (FCA), IP sales in the first half of 2019 reached their highest level since FCA records began in Q2 of 2005.

But while many people understand that income protection and group income protection are primarily designed to provide an income to an individual when they are unable to work due to an illness or injury, such protection also comes with added-value benefits.

Added-value IP benefits

To supplement the cover provided and allow people to afford value from day one, insurers have developed a wide range of free added-value services, making IP even more attractive to both employers and employees alike. So even without submitting a claim, employers and employees can take advantage of IP services that are in addition to the standard cover provided.

Employee assistance programmes (EAPs) are perhaps the most common add-on service associated with IP. They complement insurers’ and employers’ early-intervention goals by helping employees deal with personal problems which might negatively impact their work performance, health and wellbeing. EAPs do this by providing access to confidential, telephone-based support, as well as information on a wide variety of topics, ranging from stress and mental health problems, to debt and childcare. EAPs often also include face-to-face counselling.

Other added-value IP services vary by insurer, but typically include:

• A second medical opinion
• Line manager training on a number of subjects, including mental health, musculoskeletal issues and cancer
• Access to back to work and rehabilitation schemes
• Bereavement counselling and therapy
• Nurse care support
• Gym discounts
• Wellness matched funding
• Will writing services
• Virtual GPs
• Health MOTs

However, while all of these added-value services offer an incredible amount of potential, one of the biggest challenges is communicating them effectively and in a way that allows advisers to easily compare and contrast.

A simple brochure in the IP welcome pack isn’t enough. Insurers need to be constantly reminding companies throughout the year about the added-value these services afford. Information on how they have actually helped individuals and how other companies are leveraging them to their advantage would serve as excellent social proof of how much of a difference added-value services can have.

Insurers need to be talking with policy holders on a constant basis and engaging them. By getting involved and putting rehabilitation and support services in place ahead of time could negate the need to file a claim altogether, which benefits all parties involved. 

Conclusion

Here we see how added-value services can provide exactly what their name implies. But there are a number of challenges for both adviser and industry alike. For advisers like myself, we are all guilty of operating in our own silo where we are comfortable, but does this offer the best client outcome? Probably not, especially when you consider there is little synergy between group and individual policies.

The challenge to providers is to offer products which can be accessed for group and individual customers, with a good starting point being to reintroduce the continuation option on group plans. This would address the issue of people having to cancel an individual policy when they join a group employer sponsored plan and being left without cover if they leave or the scheme is terminated.