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In this second article using Iress data, Andrew Wibberley, co-chair, IPTF, looks at occupation as a driver for income protection sales.

The data (below) is clear that the most common applicants for income protection (IP) come from medical professions. This reveals a simple sales message for advisers, or insurers – “Buy the protection product that your doctor does” (or something more 2020s than 1920s).

The top ten occupations for those buying full-term IP, according to Iress, are:

  1. Doctor – health
  2. GP – general practitioner – doctor
  3. Teacher
  4. Administrator – office
  5. Manager – admin only
  6. Project manager/programme manager
  7. Airline pilots
  8. Accountant
  9. Nurse
  10. Manager – other

As well as the medical knowledge and awareness of risk that doctors possess, another primarily public service role sits at number three in the charts. Teachers follow the overlapping duo of “Doctor-health” and “GP – doctor” to complete the podium of well-insured occupations. This should remind advisers that even where there are good basic sick pay schemes, as are received in these occupations, the long-term risk requires insurance.

Chris Blyth, founder, Protect365, said: “Medical professionals see first hand people being off work due to injury and illness, the recovery time and how it can impact on finances, plus the waiting lists can mean income is affected well before the client hits the NHS.”

Nick Erskine, director of distribution, Zurich, cites this as an example of the power of education. He said: “Certain medical professions receive training about locum and other insurances, as well as the importance of protecting their income.

“This demonstrates how consumer education at an early age can help to drive greater awareness of the risks associated with a lost income and, ultimately, the take up of IP.”

Because of the scale of these occupations, there is also the potential for advisers and insurers to specialise in these areas. Advisers need to understand the schemes that may be in place and can use insurer products to supplement these. Exceptional protection advisers will know this is true for local businesses as well – as advisers understand company schemes and get referrals from colleagues, there is the opportunity to educate and assist people more effectively.

Blyth confirms the advantages of advisers having this knowledge and there being bespoke features available to these professions. He said: “It’s a happy conversation when you can highlight special deals from providers because the client is a surgeon, dentist, nurse etc.

“We’re seeing more and more medical professionals go private and set up limited companies, losing their sick pay but increasing their earnings. They are fully aware what a great benefit they’re losing and that it needs replacing.”

Shorter term IP

As we look at shorter term IP products, the story becomes more varied in terms of occupation. It is interesting to note that doctors disappear from the list completely, potentially for a combination of:

  • Being able to afford the long-term IP.
  • Understanding the risk of long-term sickness.
  • Their existing benefits covering them for a “breathing space” type product.

The top ten occupations for those buying short-term IP, according to Iress, are:

  1. Nurse
  2. Driver – HGV
  3. Administrator – office
  4. Manager – admin only
  5. Care assistant
  6. Project manager/programme manager
  7. Manager – other
  8. Teacher
  9. Builder
  10. Carpenter and joiner

Shorter term products have really driven the growth in IP sales over the last three years, it is fascinating to look at the occupations that are driving interest in this space. Again, there is a medical profession at the top of the pile – nurses, with care assistants sitting at number five. Another reminder that those who see the impact of illness, see value in the product. It is a reassuring sign for the industry and a message we need to amplify.

Other jobs in the top 10 list are varied – emphasising that IP is increasingly needed across a broad range of society.

Erskine said: “Short term IP is typically bought when full term IP is out of budget resulting in this broader range of occupations and less uptake in higher paying roles.

“However, under the Consumer Duty it’s more important than ever for customers to understand the potential impact and shortfall in cover when short term cover is chosen over full term and determining the right balance for the customer.”

An observation is that there is a lack of growth jobs. Outside a project/programme manager there is nothing overtly tech-based and interestingly nothing in there that appears to be financial services related.

It will be interesting to see what this list looks like in five years’ time as occupation, state and employer support continue to evolve. We look forward to tracking this and sharing insights to further expand IP coverage in the future.