Friends Provident's research shows that although 68% of advisers are aware of the changes made through the Welfare Reform Act, their clients are not so savvy; 79% of advisers feel their clients are not even aware that the changes have taken place, and 66% reported that most of their clients think that it's unlikely that they'll be off work for six months or more due to illness or accidental injury.
The importance of IP provision has been pushed to the top of the agenda by the recent first anniversary of the implementation of the Welfare Reform Act. In February 2009, there were 2.6 million people claiming Employment Support Allowance (ESA, previously Incapacity Benefit). The Government aims to reduce those who are eligible for ESA through an inability to work due to sickness or injury by 1 million by implementing more stringent criteria for claiming, and encouraging potential claimants back into work.
In the view of advisers surveyed, consumer awareness of the Welfare Reform Act is low. Only 28% of advisers believe that the State would be able to provide their clients enough money for them to live on via ESA. Despite this clear opportunity for Income Protection, 89% of advisers who sell IP admit that they have not used the changes in the Welfare Reform Act as a tool to boost sales.
Ed Stuart-Brown, head of protection sales at Friends Provident said: "People need to take responsibility to protect themselves from the financial hardship of an illness or injury by ensuring they have adequate Income Protection. They need to switch on to the fact that the State is unlikely to meet their needs should the worst happen. At Friends Provident, we are encouraging people to think about the consequences of not having adequate provision, by enhancing advisers' sales techniques through our programme of online seminars, to help kick-start these conversations.”
