VitalityLife: Advisers see rise in demand for business protection

Michael Lloyd

January 7, 2020

income protection

Nearly a quarter (24%) of advisers with corporate clients have seen the demand for business protection rise in the past five years, according to insurer VitalityLife.

Advisers put this down to more awareness amongst businesses about the need for protection, a rise in the number of SMEs and the self-employed, and the legislation that brought about tax-efficient relevant life cover products.

Craig Palfrey, independent financial adviser at Penguin Wealth, said: “It’s great to see that enquiries from businesses for protection insurance are rising.

“This is a crucially important area and one that is sometimes overlooked by advisers and insurers.

“Essentially, it is often the same clients and the same products – but with the angle focused on protecting the future of the business as opposed to the mortgage or family.

“And with auto-enrolment, relevant life and ongoing insecurity around UK business and finance, the need for advice on business protection is only likely to increase.”

However in contrast to those seeing an increase in interest, 14% of advisers with corporate clients have seen a decrease in business protection conversations over the past five years.

They blamed an ageing client book that are more focussed on retirement, cover already being in place for the majority of clients and the long process often involved.

A large number of advisers aren’t prioritising their own business protection needs with almost half (46%) not having any cover in place for their company, rising to 59% for advisers that are sole traders.

Deepak Jobanputra, managing director at VitalityLife, added: “Business protection is often neglected by company owners, yet it is vital for people to safeguard against the unexpected loss or illness of a business owner or a key person.

“This is why it is encouraging to see these results showing that more people are actively seeking out this type of protection.

“Over the past few years we have seen a real step change in information and the support available to advisers around business protection, but it’s clear there is more that can be done.

“This is one of the reasons we have a full spectrum of flexible products, aimed at specifically meeting the needs of the different types of businesses on advisers’ books.

“Plus, with the introduction of serious illness cover for business protection clients, advisers will be able to offer their clients more comprehensive benefits for their money with the ability to claim earlier if they were to ever get ill.”

Advisers want improved product features (28%) and more support and training from insurers (24%) to help them better meet clients’ business protection needs.

A further 14% of advisers with corporate clients would like to see new business protection tools, including tele-underwriting support and sales collateral.

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