Protection products are rated as ‘essential’ for consumers to have as part of their overall financial planning by 94% of IFAs according to a survey conducted as part of Scottish Provident’s Financial Safety Net report.
In the survey, which questioned IFAs on their views of protection products and how they are perceived by consumers, life assurance (48%) was listed as the most essential if consumers could only take out one product. This was followed by income protection (36%), critical illness cover (16%) and finally unemployment benefit.
Despite this, the majority of IFAs stated that only between one and 20% of their clients are currently asking them about protection products. Nearly seven in ten believe that the overall cost of taking out a policy is one of the main reasons for clients not to take up the option, while two in five feel that their clients have a lack of understanding of protection.
A third of IFAs state their clients believe that state benefits will provide the necessary financial support should they need it.
Susan Barclay, head of marketing, Scottish Provident, said: “Whilst IFAs are adamant about the importance of protection products, and in particular life assurance as part of their clients’ overall financial planning, it is worrying that the majority of clients remain inert when it comes to enquiring about protection.
“With a third of their clients believing that state benefits will provide the necessary financial support should they need it, it is clear that many haven’t contemplated the financial hardship of having to cope without the main breadwinner. Our Financial Safety Net Campaign is designed to help IFAs educate their clients on the benefits of life assurance and other protection products, which are at the heart of financial planning and will provide a robust safety net should they need something to fall back on in times of need.”
