74% of IFAs surveyed by Royal London think younger consumers are not addressing their protection needs early enough, with 43% of advisers struggling to attract clients under the age of 35.
87% of IFAs agree that iIP is undersold in the industry, with the main barriers to selling or recommending the product being a lack of awareness of income protection among clients (52%).
Affordability was another obstacle for selling income protection according to 51% of advisers despite the fact that, on average, income protection is cheaper than a monthly gym membership.
A barrier to selling income protection to clients was that it was perceived to be too expensive but Royal London found that a gym membership is more than double the price of IP.
72% of advisers agreed that the protection gap is increasing, while 63% feel that protection products need to be tailored to fit the needs of the changing lifestyles of consumers.
IFAs were divided on the likelihood of providing protection to those working in the “gig economy”. 29% believe the gig economy presents an opportunity to the income protection market, with some advisers seeing it as a chance to engage with a market that is typically underinsured. However, some advisers saw the rise of freelance work as a threat for the industry (28%), mostly because the irregularity of work and income could make it harder for clients to commit to spending on protection plans.
Jennifer Gilchrist, protection specialist at Royal London, said: “It’s clear from the research that we need to raise awareness of the benefits of income protection, especially amongst younger consumers. As part of this, we need to tackle the perception of protection being expensive. There is a whole range of options that can be personalised to individual budgets and customers often tell us they are pleasantly surprised when they find protection isn’t as costly as they anticipated.
“Customers are at the heart of what we do, so any insight into their needs is valuable in helping us to provide better outcomes for them which will help to bridge the protection gap.”
