Two futures for income protection cover
In the good version, clients, insurers, and advisers increasingly recognise the value of having some cover, even if it isn’t the best or most extensive.
By bringing more lives to the market, the product profitability gradually improves, premium increases are moderate and one-year or two-year cover at between 50% and 60% of income to cover a home loan and standard expenses get sold in much higher numbers.
If this kind of IP cover took off, we could see sales double. It would add some much needed ‘true new’ premium to the industry and take income cover from a modest 20% of the market up to something more like 60%.
Most of the balance of the risks are already well covered by savings, early retirement, and costs are met in-part by trauma and medical insurance.
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