The provision of group income protection (IP) can be the ideal spur for brokers looking to break into the corporate market. Reducing margins, increased compliance costs on top of greater broker and product-provider competition make it surprising that intermediaries have yet to uncover its true value.
Corporate IP is the IFA’s dream product, if statistics are to be believed. Only one in ten UK companies has IP in its member benefits package. Three out of five companies do not know how much it would cost them, and more than half do not have a stencil or calculation for working out the cost to the business of long-term illness to key personnel. Companies rely on burdening existing staff to cope with extended absences through illness.
Ignorance about the paucity of state benefits has done nothing to redress this gap in the market.
Healthcare advice opens the door to enquiries about wider-ranging financial advice, and offers personal and corporate introductions. Any self-respecting financial director will be eager to curb the salary bill on his balance sheet. The tax treatment of group IP can meet this need.
In today’s working climate employee benefits can influence staff retention, company morale and overall profitability, and group IP fits the bill nicely. It is more than a straightforward financial benefit. Some insurers are leading the way in rehabilitation for claimants by enlisting the help of qualified medical experts (with support ranging from physiotherapy to counselling).
This benefits the employer (who would like his valued member of staff to return) and the employee.
With ever-changing government reforms and the increased scrutiny of a new compliance regime, group IP can be regarded, not only as a safe harbour in the choppy waters of complied advice, but also as a foolproof ally to the healthcare intermediary in the process of managing risk and liability.