The latest research from insurer, VitalityLife, has revealed that despite almost half of advisers not protecting their own business, 24% have reported a rise in demand for business protection.
According to the findings, nearly a quarter of advisers have seen demand for business protection rise over the last five years.
But in order to capitalise on the increased interest, advisers have stated they 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.
When asked about the reasons behind the increased interest in business protection, advisers said it was 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.
Craig Palfrey, IFA at Penguin Wealth, comments: “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 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 it being a hard slog for the reward, because of the long process often involved.
To that end, 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. This could be down to the fact that just 48% of advisers regularly advise on business protection matters, compared to the 88% that regularly advise on personal protection, highlighting the need for providers to step up and give adviser firms more support, to be able to confidently talk to clients about business protection
In October 2019, VitalityLife announced a new enhancement to its business protection offering by launching Serious Illness Cover for Business, and adding tele-underwriting carried out by trained Vitality Nurses to its Relevant Life and Business Protection Plans. It also increased its guaranteed insurability options (GIOs) on Business Protection Plans, as well as adding GIOs to Relevant Life Plans. The insurer also added signature-free online trust functionality, and increased the maximum level of immediate cover on its Business Protection Plan from £500,000 to £1,000,000, to ensure a high level of cover is in place throughout the application.
Deepak Jobanputra, Managing Director at VitalityLife, 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.”