Advisers warn self-employed clients are under-protected

Michael Lloyd

February 27, 2019

The rise of self-employment is helping drive sales of individual protection products but advisers are increasingly concerned that self-employed clients are under-protected, the insurer MetLife UK has found.

Its nationwide study found the average adviser now has more than one in five clients (21%) who are self-employed and 57% said self-employed clients are a potential major growth area. That mirrors government figures showing 4.77 million are self-employed, about 14.7% of the total workforce.

Richard Horner, head of individual protection, MetLife UK said: “Self-employed workers are particularly vulnerable if they or one of their family suffers an injury or accident which makes it difficult to work and earn money.

“The growth of self-employment has been a major trend across the UK economy and advisers are seeing this mirrored in their client base with on average one in five clients now self-employed.

“Everyday risks such as children getting injured or becoming ill are a bigger risk for the self-employed if they have to take time off work to look after them and the same applies if they themself suffer injuries as they do not have the same rights to Statutory Sick Pay.

“Individual protection products have a major role to play in supporting the self-employed.”

But advisers are concerned that self-employed clients do not have enough protection cover to help provide financial support if they are unable to work.

Some 56% of advisers believed self-employed clients are under-protected whereas 34% believed self-employed clients have enough protection.

More than two out of five (43%) of advisers said they struggle to convince self-employed clients to increase their protection with affordability seen as the biggest barrier.

Around 39% of advisers said self-employed clients worry about the cost, 34% said clients do not prioritise individual protection and 12% thought policies are inflexible.

MetLife’s MultiProtect accident and hospital cover product, which is designed to complement traditional protection policies, helps address the affordability issue with individual cover starting from £8 a month.

Its focus on paying claims quickly makes it a real benefit for self-employed clients who will be unable to earn if they cannot work.

MultiProtect offers cover for between £8 and £40 a month and does not require medical underwriting, with customers being able to get covered in under four minutes.

Families can add optional cover for children up to the age of 23 in full-time education from £1 extra per month. If both parents add this optional cover to their policies it provides double the level of cover.

Key benefits with MultiProtect include cover for a range of accidental injuries such as broken bones and for UK hospital stays related to accidental injuries and for sickness after the policy has been in force for sickness.

Maximum payouts are up to £250 a day for UK hospital stays; £3,750 for broken bones;  £250,000 for total permanent disability; and £200,000 for accidental death. Customers can take out a policy from age 18 up to their 60th birthday and cover will continue until they reach 70.

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