In the last five years, nearly 24% of advisers with corporate clients have seen an increase in the demand for business protection.
The figures showed that roughly 28% of advisers have stated they want to improve product features and 24% want more support and training from insurers to meet their clients’ business protection needs. Additionally, 14% of advisers would like to see new business protection tools, including tele-underwriting support and sales collateral, according to research from VitalityLife.
Business protection demand
Advisers’ increased interest in business prevention is largely 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.
In contrast, 14% of advisers with corporate clients have actually seen a decrease in business protection conversations over the last five years, blaming an ageing client book that are more focused on retirement, cover already being in place for the majority of clients, and the long process often involved.
Nearly 46% of advisers aren’t prioritising their business protection needs by not having any cover in place for their company – rising to 59% for advisers that are sole traders. This can be because only 48% of advisers regularly advise on business protection matters, compared to 88% that regularly advise on personal protection.
In October 2019, VitalityLife launched Serious Illness Cover for Business and added tele-underwriting carried out by Vitality Nurses to its Relevant Life and Business Protection Plans.
The insurer also increased its guaranteed insurability options (GIOs) on Business Protection Plans, as well as adding GIOs to Relevant Life Plans. Signature-free online trust functionality is also available.
An increase in the maximum level of immediate cover on its Business Protection Plan from also went from £500,000 to £1,000,000, to ensure a high level of cover is in place throughout the application.
Penguin Wealth IFA Craig Palfrey 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.”
VitalityLife managing director Deepak Jobanputra said: “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.”