LifeQuote has revealed that it expects estate and letting agents to engage in selling and introducing more protection policies as the commission they would receive could help to make up for the financial shortfall from the ban on letting agent fees.
The firm argues that, with letting agents reporting the average letting fee being around £200, the commission received from selling protection policies could more than cover this financial loss. Typical commission on an income protection policy can often range between £250 to £1,000.
Currently only 40% of those born in the early 1980s are owner-occupiers, compared to at least 55% of the 1940 to 1970s cohorts. As a result, the way income protection is sold needs to change and the banning of letting fees could help the process, LifeQuote says.
Neil McCarthy, sales and marketing director, LifeQuote, said: “There is a popular misconception that renters don’t need protection. This may be true for some people and indeed bizarrely could be detrimental, as it could impact on means testing and Universal Credit.
“But, there are many more for whom protection is essential as their rental payments are broadly equivalent to a mortgage payment and, similarly, the loss of income equally devastating. As a result this ban may have positive consequences for the protection market.”
