Customers are talking about the cost of living crisis more when discussing protection so any help government can provide is to be welcomed, advisers told Health & Protection.
Chancellor Rishi Sunak yesterday scrapped the government’s original plan to give people £200 off bills from October which would be repaid over five years, and instead doubled that sum with it not needing to be paid back. Eight million of the lowest income households will also be sent a one-off payment of £650.
Sunak also u-turned by confirming a temporary 25% levy on the profits of oil and gas companies, with the levy phased out upon energy prices returning to more normal levels. The Conservatives had previously criticised proposals from Labour to enact the windfall tax on energy company profits and voted it down in Parliament.
Naomi Greatorex, managing director at Heath Protection Solutions, said people were talking about budgetary pressures more often now, which meant advisers need to tailor their conversations accordingly.
“It’s been really important to have that conversation asking: ‘Does this fit your budget now and in the future? Do you feel you will be able to make these payments?'” Greatorex said.
“If not, is there anything we can look at within the insurance policies that we’re recommending?
“So family income benefit as an option to keep the cost of life insurance down is one thing and budget income protection is always a conversation to get some sort of cover within people’s budget.
“Budget income protection pays out for a limited claim period and full income protection pays an unlimited claim period. Budget is approximately 50% cheaper.”
Kate Stratton, managing director at Mortgage Services, told Health & Protection that while her customers had not mentioned the cost of living crisis that much as first time buyers typically did not know how much gas and electricity was going to cost them, it had been brought up more in recent months.
“It’s probably being brought up a little bit more in the sense that it’s a talking point for people, but I don’t think it’s stopping people from taking out protection at the moment,” Stratton said.
“I think any measures that government bring in is going to help because costs are rising and they are getting ridiculous, so I do think any help government can give is a good thing.”
But Andrew Wilkinson, director at Moneysworth, told Health & Protection he has not noticed much change in people with health conditions approaching the firm for help with their protection needs.
“In some ways the war and accompanying economic consequences have similarities with the pandemic in terms of making some people think about their protection needs and consider taking action to de-risk their situations,” Wilkinson said.
“However, many of those on lower incomes might feel at the current time too squeezed financially to be able to afford taking on protection insurance.”
‘Step in the right direction’
Providing a private medical insurance (PMI) perspective, Isaac Feiner, owner of Lifepoint Healthcare, said the government’s move was “certainly a step in the right direction”.
“Whatever can be done to alleviate people’s pain is a good thing. But is it enough? Probably not,” Feiner said.
“There need to be breaks given across multiple areas of living costs. One way would be to alleviate various burdens on business owners so that they can actually find a way to give more to employees and assist that way.
“Many businesses want to do more but simply cannot afford to. Those that can absolutely should look inward and help their staff.”
Feiner added that while interest in PMI remained high due to high NHS waiting lists, the cost of these arrangements was a “huge” factor.
“Certainly and without a doubt now more then ever the subject of removing insurance premium tax (IPT) should be reconsidered and deployed,” he continued.
“Remove IPT and it will instantly solve so many issues. We would undoubtedly sell more insurance, which would have a direct impact on the NHS pressures.”
Steve Ellis, associate director at Prosperis, told Health & Protection that people will be analysing their expenditure and in many cases their protection and PMI may be sacrificed.
But Ellis added with the NHS under intense pressure, PMI had never been more important.
“Many employers have recognised this and have put schemes in place, however, the extra P11D burden may mean some people decide not to join,” he continued.
“As advisers we need to ensure employers have a clear communication strategy with employees so they understand the added benefits many plans offer which can help save money elsewhere to offset the P11D.
“One area we often neglect as it is not seen as a major benefit is the cashplan. Employers can give a real boost to the health and welfare of employees who may put off the visit to optician or dentist on cost grounds. As one of our old leaders said it’s back to basics.”
