Why is now the right time to talk to clients about income protection?

Is it time to talk to your clients about income protection? According to Scottish Widows research, a staggering 53% of people either haven’t heard of income protection or don’t know what it is.^* This lack of knowledge is worrying, especially considering that 30% of UK adults have either no savings or less than £1,000 in a savings account and 1 in 4 adults had low financial resilience.^*** Imagine the relief income protection could bring to these individuals, securing their finances against unforeseen circumstances.

Communicating the message

Only 7% of the population currently have income protection.^* This low awareness rate reveals a critical need for education. As an adviser, you have the power to clarify misconceptions and highlight the benefits. Explain how income protection works in simple, relatable language. Your professional advice can bridge the gap between confusion and confidence, giving clients the chance to ask questions and gain a clear understanding of the product and its advantages.

Sitting down with clients

Our research indicates that over 50% of workers fear the loss of income due to illness or injury.^* Use this concern to start a dialogue. Examine their company’s sick pay scheme and the minimal state support available. Together, review their savings and other potential income sources, then naturally lead into a discussion about the suitability of income protection. Tailor the conversation to their unique circumstances, emphasising the product’s flexibility, such as the deferred period length and adjusting cover amounts for life events.

Overcoming barriers

The cost of income protection can be a barrier, but it’s crucial to establish the client’s need and comprehension first. Highlight built-in features offered by some policies like fracture cover and hospitalisation cover-easy concepts for clients to grasp. Show how these benefits can help towards financial resilience, especially for the self-employed. Explain top-up payments for reduced hours and immediate payments with a doctor’s note. Emphasise health and wellbeing services that extend the value of income protection beyond claims, making premiums feel like investments in their overall safety.

Adding value

Added value benefits can be just as significant as the protection itself, especially in today’s challenging economic climate. Under Consumer Duty, we must demonstrate the product's value, showcasing how advising, referring, or signposting clients to protection can mitigate foreseeable harms. Misconceptions about insurers’ willingness to pay out should be tackled head-on-income protection insurers pay out over 81% of claims^**. Clarify that declined claims are often due to misrepresentation and misunderstanding rather than unwillingness.

Income protection is gaining traction as a go-to solution for clients, evidenced by a 18% sales increase last year^**** and ongoing momentum in 2025. Understanding the opportunity and the value it brings to clients and your business positions you to have impactful conversations that resonate.

Once you grasp the benefits of income protection, you’ll be equipped to guide your clients towards a safer financial future. Engage them with confidence, educate them with clarity, and watch as they appreciate the security income protection offers.

Sources:

^* LBG Protection Research, YouGov January 2025

^** ABI Income Protection Statistics 2024

^*** FCA Financial Lives Survey, 2024

^**** Swiss Re Term & Health watch, 2025