Gemma Harle is managing director of TenetLime
Recent research has again revealed the importance of life cover for adults throughout their lives. Scottish Provident published that 18% of paid out claims were for policyholders aged just 44 or under with 32% aged between 45-54 years old.
Since the credit crunch many brokers have dramatically increased the level of protection business they sell. What’s more men have an average of almost 50% more life cover than women, according to new research from Scottish Provident.
Not surprisingly networks have developed solutions to help manage these risks. These are timely given that with an ageing population sales of these products are likely to continue to drive broker business.
The market offers much room for growth. Other research shows the average sum assured for men between the age of 30 and 70 is £148,559 compared with £100,463 for women and the cover gap gets wider as we get older.
But the biggest and most immediate driver is the new European legislation effective at the end of this year with regard gender equality providing added urgency for clients to review their arrangements before premiums are hiked.
Many brokers have effectively reversed the volumes of mortgage and protection business they were writing before the credit crunch. But with the issues of cash-flow front of mind many have understandably opted to reject lower monthly commission payments for the life of the policy in return for larger up front indemnity payments for a two or four year period. These expose unwitting principals of brokerages to significant claw-back risks.
This market will be a growth area over the coming years, it’s important that brokers approach it with the right mind-set.