Income Protection:
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Handling common Objections
If your clients think about becoming too ill to work, they may expect to just “get by” financially. The reality is your client’s outgoings won’t stop just because their income did. Help your client see the true value of income protection with responses to these common objections:
“I don’t spend that much.”
The average household spends £1,400 on essential outgoings each month*. One of the first things anyone should do when considering their financial situation is to go through their household budget.
Get your client to fill in a budget planner – when they write it down, the reality starts to hit home.
*LV= Reaching Resilience research – August 2022
Get your client to fill in a budget planner – when they write it down, the reality starts to hit home.
*LV= Reaching Resilience research – August 2022
“I’ll just use my savings.”
Money Helper states that people should have three months' of outgoings in savings.
If your client losses their income, how long will their savings last? Even large amounts of savings can diminish quickly. And that would be even more painful if they'd hoped to spend that money on the good things in life - like a new car or holiday.
Almost half (47%) of workers contribute less than £125 to their savings each month*.
Even large amounts of savings can vanish in a matter of weeks if they lose their income. Use a budget planner to calculate their monthly spend and divide that by their savings. How long would they last?
*LV= Reaching Resilience research – August 2022
If your client losses their income, how long will their savings last? Even large amounts of savings can diminish quickly. And that would be even more painful if they'd hoped to spend that money on the good things in life - like a new car or holiday.
Almost half (47%) of workers contribute less than £125 to their savings each month*.
Even large amounts of savings can vanish in a matter of weeks if they lose their income. Use a budget planner to calculate their monthly spend and divide that by their savings. How long would they last?
*LV= Reaching Resilience research – August 2022
“I’ll rely on my employer.”
Just 38% of employees stated their employer would provide them with occupational sick-pay above the minimum requirement*. As part of your preparations, ask your clients' to bring along their contract of employment and sickness benefit statement.
Nearly 4.3 million** people are self-employed. If that’s your client - they’re on their own.
We’ll cover up to 60% of your client’s net profit if they're self-employed. We understand self-employed income can fluctuate, and we’ll usually look at your client’s first years’ income when working out the maximum benefit payable at claim. Upon request we will also review 3 years’ of income.
*LV= Reaching Resilience research – August 2022
**Statista - Self-employment in the UK
Nearly 4.3 million** people are self-employed. If that’s your client - they’re on their own.
We’ll cover up to 60% of your client’s net profit if they're self-employed. We understand self-employed income can fluctuate, and we’ll usually look at your client’s first years’ income when working out the maximum benefit payable at claim. Upon request we will also review 3 years’ of income.
*LV= Reaching Resilience research – August 2022
**Statista - Self-employment in the UK
“The state will help me.”
The good news is that the state will give your client £109.40 a week for up to 28 weeks if they can't work due to ill health.
Unfortunately not everyone is eligible for Statutory Sick Pay – it’s only available for people who are employed. With the average household spending £1,400 on essential outgoings each month**, this is unlikely to cover all other monthly expenses.
So what happens after the 28 weeks of Statutory Sick Pay?
If your client is still off work due to ill health they could be entitled to Employment & Support Allowance. They also have to undergo a stringent series of assessments about their ability to do any work – around a third of ESA applicants get some form of ESA benefit. For those who are ‘successful’, benefits provide basic support – the maximum ESA payment is now £129.50 a week.
For more information on the full state benefits available to your client go to www.gov.uk.
Based on benefit rates from April 2023. The figures used don’t take into account any temporary or short-term changes.
*LV= Reaching Resilience research – August 2022
Unfortunately not everyone is eligible for Statutory Sick Pay – it’s only available for people who are employed. With the average household spending £1,400 on essential outgoings each month**, this is unlikely to cover all other monthly expenses.
So what happens after the 28 weeks of Statutory Sick Pay?
If your client is still off work due to ill health they could be entitled to Employment & Support Allowance. They also have to undergo a stringent series of assessments about their ability to do any work – around a third of ESA applicants get some form of ESA benefit. For those who are ‘successful’, benefits provide basic support – the maximum ESA payment is now £129.50 a week.
For more information on the full state benefits available to your client go to www.gov.uk.
Based on benefit rates from April 2023. The figures used don’t take into account any temporary or short-term changes.
*LV= Reaching Resilience research – August 2022
“I’ll take out credit.”
With interest rates still at low levels, credit is easier to secure. The average worker has £11k of debt, excluding mortgages*. While your client might be able to use their credit card limit to cover their expenses, for many this wouldn’t be a long-term solution and could make their situation worse as they’ll be deeper in debt.
So, if your client or their partner were to be off work ill for a time, the prospects of ‘getting by’ seem bleak for many. But, there is a solution in Income Protection.
*LV= Reaching Resilience research – August 2022
So, if your client or their partner were to be off work ill for a time, the prospects of ‘getting by’ seem bleak for many. But, there is a solution in Income Protection.
*LV= Reaching Resilience research – August 2022
Income Protection – pays out when your clients need it
In 2022, we paid 92%* of all our Income Protection claims.
We always aim to pay claims where we’ve had full medical disclosure. Usually, the only claims we cannot pay are where someone hasn’t been entirely honest about their medical history or where their reason for claiming is not supported by the medical evidence provided when they claim. We go to exceptional lengths to try and prevent this from happening.
*This includes new claims admitted in 2022 and those already in payment before 1 January 2022 that continued to be paid in 2022. We paid 80% of Income Protection claims admitted in 2022.
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