Discussing group income protection (GIP) with clients can open up additional business opportunities to arrange individual protection policies with staff, according to Pangea Life.
The adviser also highlighted the importance of GIP and executive IP and that it can be the only way some people are able to get IP cover.
Lee Thomas, business protection consultant at Pangea Life, (pictured) gave a presentation on the third day of the Income Protection Task Force’s (IPTF) Income Protection Awareness Week illustrating how the opportunities could cross over.
Thomas recommended advisers engage with employers in a way that affords them access to their employees when arranging group income protection.
“Maybe do an onboarding presentation,” he said.
“Explain to all the staff this is the cover you’ve now got – these are the additional services you have access to, these are the additional services that even your dependants have access to.”
At this point, Thomas added advisers should introduced the topic of protection.
“You may well find that of the staff you speak to some want to increase their income protection to have a policy that personally picks up where their group policy ends – maybe they want some life insurance advice,” he continued.
“Maybe they want some pensions advice.
“Potentially you’ve gone from one client to an audience now of however many employees that also want your advice, so you can create a lot of new business opportunities as well.”
‘The only way some people get IP’
Thomas also used his talk to extol the virtues of executive income protection and group income protection.
On executive income protection, Thomas explained this type of protection has a number of advantages such as being able to cover 80% of an individual’s gross pay as well as dividends.
This can also include employer pension contributions and the spouse’s gross pay and dividends when calculating the benefit where the spouse works for the key life that is being insured.
Turning to group income protection, Thomas added that under these policies 75% to 80% of workers’ gross pay can be covered, along with their employer national insurance contributions and their employer and employee pension contributions.
And of course, where risks are pooled it can be significantly cheaper to insure 10 people on a group policy than to write 10 individual policies.
But he said the “absolute game changer” is the free cover limit.
“What this means is there is a level of cover that you can provide each individual on the scheme without any underwriting,” he continued.
“That means sometimes I’ve been able to provide cover for a business owner through their business where individual protection was never even an option or was going to be significantly rated, have exclusions particularly for conditions that they were worried about because it was in their medical history or they’ve been declined.
“So group income protection can sometimes be the only way an individual can get income protection.”