Everything seems to be moving in the right direction but there is still a long way to go with a huge self-employed market still exposed. Office for National Statistics data shows there were 4.6m self-employed people in the UK in 2015, the most up-to-date statistics available. Swiss Re estimates that fewer than 10 per cent have any protection against long-term loss of income.
Plus, thanks to changes to welfare reform in April 2017 and the plethora of changes that came with the introduction of Universal Credit, many people will be worse off if the state is their only fallback option in the event of long-term ill health or injury.
The IP industry has worked hard to raise awareness of the benefits of this important product and instill confidence that it will pay out, with many providers now openly communicating their claims payout rates and main reasons for declines.
Additionally, as per other areas of protection, the IP market is cognisant of the fact that it needs to offer services that help ensure ongoing engagement with customers. There is now a growing emphasis on early intervention and rehabilitation support to help make the product more attractive to consumers.
For example, in February 2017, British Friendly launched its discretionary Mutual Benefits programme. This rewards members for their loyalty by giving them access to high street discounts and prize draws. It also includes additional benefits such as a death benefit, bereavement benefit and care assistance benefit, all of which provide members with cover beyond IP.
Nick Telfer, product and marketing director at British Friendly, comments: “Mutual benefits also gives members access to a range of valuable services through Square Health including a virtual GP service, physiotherapy, counselling and a medical second opinion service.
“The programme also includes bespoke offers exclusively for British Friendly members including the opportunity to create one free Will online through Legal for Life and to take out comprehensive health cash plans through Health Shield.
"All these benefits add more value to our members’ policies giving them the opportunity to make use of their policy everyday as well as when they need to claim their income protection benefit.”
Private medical insurance
Pricing in the PMI market has seen an unwelcome jolt in the past couple of years due to the doubling of Insurance Premium Tax (IPT), which stood at 6 per cent in October 2015 and is now up at 12 per cent after three increases in quick succession.
The wisdom of subjecting PMI to a swinging tax is questionable given the symbiotic relationship between the private healthcare sector and the NHS, but it is hard to imagine a less fashionable cause than a tax cut for those who can afford private medical insurance, however compelling the argument for relieving pressure on the Health Service.
