Nick Telfer: Putting prevention into income protection
Helping clients to remain in good health and avoid falling out of work in the first place should be a natural feature of income protection writes Vitality’s Head of Protection Development Nick Telfer.
Income Protection (IP) is undoubtedly one of the big industry success stories of recent times. Sales of new IP policies have soared and saw double-digit growth in 2024.1
Consumers and advisers alike are waking up to the importance of IP, thanks to the efforts of groups like the Income Protection Task Force championing IP. Consumer Duty has also played a part, requiring advisers to deliver good outcomes and avoid foreseeable harm through more comprehensive protection advice.
Encouragingly, research conducted by the Association of Mortgage Intermediaries found that found that 65% of Gen Z and 70% of Millennials now think it’s important to have IP in place.2
Poor financial and health resilience
We mustn’t be complacent though. Despite the progress made, millions of households still do not have adequate cover in place.
In our rapidly changing and volatile world, many of the traditional arguments for protection – peace of mind and a financial safety net against catastrophic, unforeseen events – often fall on deaf ears.
We’re also losing many of the touchpoints that would have traditionally triggered an income protection conversation, as less people are getting married, starting a family or moving onto the property ladder.
According to the most recent Financial Lives survey from the FCA, almost a quarter of UK adults have low financial resilience3, exposing them to serious hardship following a loss of income.
Poor health meanwhile is posing an ever-greater challenge, with record numbers of people out of work due to long-term sickness4, lost productivity due to ill-health estimated to have cost the UK economy £860 billion between 2014 and 20245, and 1 in 5 of the adult population in England projected to be living with major illness by 20406.
Prevention is better than claim
Even before an IP claim is made, there’s a role that insurers can play – with the help of advisers – in helping to prevent ill-health from arising in the first place and to keep the client in work.
“Even before an IP claim is made there’s a role that insurers can play in helping to prevent ill-health from arising in the first place”
Nick Telfer, Head of Protection Development, Vitality
We live in a world today that is more than ever aware of the impact that positive lifestyle choices can make in helping us to live a healthier, longer life.
As Vitality’s Dr Katie Tryon points out, “nearly half (43%) of the health burden in the UK is preventable and 88% of that is down to modifiable lifestyle risks, such as poor exercise and nutrition”.
By actively encouraging clients to move more, eat better and take part in activities that are good for their mental and physical health (and rewarding them for it), not only do they have the security of cover should a claim arise, but they are less likely to need to make one – which ultimately given the choice, most people would surely prefer.
This is backed up by evidence as Dr Tryon highlights: “findings published in The Vitality Habit Index report highlight that adopting even just simple, healthy habits – such as walking – can improve life expectancy and reduce the risk of conditions like cancer”.
With cancer representing the most common cause of Vitality IP claims in 20247, these findings are significant. According to the research, people who sustained a habit of 10,000 steps three times a week for three years saw a 19% reduction in risk of stage 3 cancer8.
Given the well-known connection between physical health and mental health, promoting a more active lifestyle can also bring positive mental health benefits, significant again given the commonness of mental health claims on IP plans.
Meanwhile, benefits like annual health checks and health screenings help to provide clients with a more accurate picture of important key health markers.
Akin to an MOT that any of us would expect to have on our car, health checks can be critical in identifying health risks before they deteriorate and taking appropriate measures to address them.
Prevention beyond the point of claim
Of course, we can’t prevent everything and sometimes life throws up unexpected curveballs. No amount of good health can prevent accidents from happening either.
This is why any preventative health and wellbeing support must extend beyond the point of claim as well, to aid the client in their recovery and rehabilitation.
A good example of this is Vitality’s unique Recovery Benefit, providing unlimited access to rehabilitation support to help get claimants back to work.
Delivered by the same services available through our Private Medical Insurance cover and offered as a contractual benefit, the Recovery Pathways provide vital support for the most common causes of claim – cancer, musculoskeletal, mental health and neurological – immediately from the point of claim.
Tangible value from day one
By prioritising prevention alongside comprehensive income protection cover, we can not only deliver better health outcomes for members, but help to unlock more immediate, tangible value as well.
Because reducing the risk of claims is a win-win for everyone, we can return more value to members through rewards and benefits, which in the current economic climate is likely to be particularly welcome.
In 2024 for example, we returned as much as £99m worth of value to members through rewards and savings from the Vitality Programme7. This is the essence of Vitality’s unique Shared Value model of insurance and also helps to create stickier, long-term business.
As IP sales continue to grow, whilst the economic and health challenges we face show no signs of easing, helping people to live in better health, whilst providing more relevant, comprehensive protection must be at the heart of what we do as an industry.
Personal Protection from Vitality
As well as offering the highest levels of protection, we also make it easier for your client's to take an active role in maintaining their wellbeing. We help them to understand their health and reward them for healthy lifestyle choices, by keeping their premiums low and giving them access to a range of discounts and rewards.
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