Income protection should be at centre of mortgage process, say brokers
Financial advisers are not talking enough with their clients about income protection, according to new figures, with just 10% of UK adults having some form of IP in place.
Research by Legal & General Mortgage Club has revealed that nearly nine in every 10 UK brokers (88%) feel they are not selling enough protection to clients, with the company urging advisers to discuss the importance of income protection more frequently with clients during and after the mortgage application process.
Legal & General’s Deadline to Breadline report also previously found that nearly a third of employees didn’t have any financial back-up plan in place should they or a loved one be affected by loss of income, redundancy, critical illness, disability or death.
The findings form part of Legal & General’s Mortgage Club Autumn Conference, at which brokers were surveyed about their views on the future of the mortgage market, as well as the potential opportunities and challenges they face. The figures follow the latest Conference poll, which had revealed that Brexit has overtaken robo-advice as the greatest threat to brokers, with a quarter of brokers choosing this option.
Legal & General’s Head of Intermediary Protection, Richard Kateley, said insurance products such as income protection were often not seen as priorities in a ‘culture of reactiveness’ and that they needed to become an intrinsic part of a mortgage sale, rather than an add-on at the end.
“The fact that only one in ten brokers believe their business is selling enough protection is evidence that our industry needs to do more to highlight the importance of protection,” said Mr Kateley. “However, encouraging your client to discuss this topic is easier said than done when we live in a culture of reactiveness.
The most successful brokers make protection a core part of the mortgage sale rather than an end of process consideration – and by this point, it is usually too late. We are happy to insure our pets, mobiles, iPad, or valuables, yet none of these will pay our mortgage if or when ‘life’ happens to us. When it comes to prioritising our own health and wellbeing, procrastination seems to come first.
“Our Deadline to Breadline research revealed that nearly a third of UK employees have no financial back-up plans should they be unable to work due to an illness, disability or death. Statistics like this cannot be ignored, and brokers are front and centre in this challenge to help clients plan with foresight. At Legal & General we want to use our market position to help close the protection gap, by making protecting the last mortgage you wrote more important than the next mortgage that needs to be arranged.”
Income protection helps to keep you afloat financially when you go through a tough patch. Policies include mortgage protection, redundancy insurance and accident and sickness cover, and are tailored to suit your own lifestyle and budget. To find out more, compare online income protection quotes or call us on 0800 862 0390.