Addressing the income needs of different demographics – everything you need to know

Income protection plans should be the foundation of every clients financial planning. The base upon which resilience can be added to other finances; from the house they call home, through family holidays (when we can again) to those special little treats that make a difference, everything depends on income. Never has this been more obvious than it is today in the current environment where the very common objection that ‘it won’t happen to me’ is easily dispelled. Income protection is there to do one thing only – provide a replacement income if your client falls ill or suffers an injury. There is no doubt that more and more clients are heeding adviser advice about the importance of protecting their income. This week we take a look at the ways to talk about income protection to different client demographics.

Contents:

• Health professionals
• Teachers
• Carers
• Housepeople

Health professionals

As public sector workers, NHS staff have generous sick pay schemes but will still need things like income protection. Income protection plans should ideally kick in when employer sick pay ends; the two arrangements need to dovetail so as to avoid any gaps in which the client would receive no income.

However, it can be difficult for advisers to match deferred periods on income protection plans to the NHS sick pay scheme, as sick pay varies depending on length of service. In this insight, we take a look at income protection for the medical profession.

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Teachers

Teachers have been front and centre of the COVID-19 pandemic. It is widely accepted that teaching is stressful profession and the last 12 months will not have eased any of those pressures. Charged with planning and delivering online lessons to armies of children, the pressure on teachers is constant. From the remote lessons of initial lockdown, through the summer exam chaos, trying help children catch up as lockdown was eased and now back to remote learning there is a lot of extra weight on teachers who were already suffering from high workloads before the pandemic started. In this insight we take a look at the considerations for setting up income protection for teachers.

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Carers

A policy briefing by Carers UK in August 2019 found that there are approximately 6.5 million people in the UK providing unpaid care. A large percentage of these were providing care for elderly relatives, but a significant proportion are caring for their spouse / partner (26%) or child (13%). Where significant level of care is required this can have a big impact on a person’s ability to work, with one in three stating that their annual household income has dropped by £20,000 or more as a result. In recent times a number of income protection plans have added carer benefits to support such clients and in this article, we look at who offers this, when and what benefits the life assured might receive.

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Housepeople

The need for income protection cover has become even more apparent during the COVID crisis, when the furlough scheme really brought to the fore the importance of the ability to maintain and income. Usually, when advisers talk of protecting income they naturally gravitate to the income of the bread-winner. It makes sense. But when those families involve children for example it’s often true to say that the breadwinner can only go out to work to bring home the bacon because there is a non-working partner to care for the children and run the home, so it can be just as important to have protection in place for a “non-working” partner who keeps the family and household running. In this article we look at what providers offer in terms of cover should this vital member of the household be out of action.

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Watch out for future “Everything you need to know” pieces where each week we will cover a different topic and provide you with the information you need to know to discuss the topics with your clients. 

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