Letter to Financial Adviser re Income Protection

As much as I agree with Ashley Hale's letter I do feel that something else is missing, the views of the client.

 

What about talking to clients about what they want, but not in any old way, rather in a manner where first of all their financial capability is raised so that they can get a good understanding of circumstances.

 

Perhaps we can refer clients to a White Paper published in December 2006 by the Income Protection Task Force (http://www.cwcresearch.co.uk/White%20Paper.pdf). Item 2. on page 7 of the paper is revealing about the conditions that most often lead to long-term ill-health / incapacity, and whether they might not be covered by critical illness policies, I quote:

 

"There are some 2.4 million Incapacity Benefit claimants. Of these, 73% have been claimants for 2 years and 48% have been claimants for 4 years. Around 40% of these claimants suffer from mental/stress illnesses and 20% suffer from musculo-skeletal disease."

 

So how many of these claimants would receive a payout from a critical illness insurance policy, if any at all? I wonder what conclusion a client might reach when put in an informed position?

 

The report goes on to say:

 

"These figures demonstrate clearly that Income Protection is the only suitable product to cover long-term disability. Moreover, levels of morbidity are such that advisers should ensure that all breadwinners are adequately insured except for the tiny minority who have adequate resources."

 

I couldn't have put it better myself.

 

Robin Keyte