The financial services industry is shifting towards more flexible and comprehensive protection strategies, with menu and multi-benefit plans. The latest episode of Let’s Talk Income Protection explores this trend in depth, offering useful insights for advisers at all stages of their career.
Income protection continues to grow, with the latest Swiss Re Term and Health Watch report showing a 15% year-on-year increase in standalone policy sales. But what’s even more significant is how income protection is now frequently included within multi-benefit plans. Data from iPipeline shows that these kinds of applications now make up 33.7% of all protection business — a 1.5% rise from the previous year.
This growth hasn’t happened by accident. As Zoe Mears from iPipeline explains, a growing number of first-time buyers are entering the market with no existing cover. This gives advisers a chance to take a more rounded approach from the outset, building protection packages that address the full picture, rather than just plugging gaps.
Regulatory changes like consumer duty are also influencing this shift. They’re encouraging advisers to have broader, more considered protection conversations. At the same time, awareness around income protection is rising, helped by industry efforts from groups like the IPTF. More advisers are now prioritising income protection as a core part of their recommendation process.
The structure of multi-benefit plans is also evolving. Around 66% of income protection policies within these plans are short-term, with 4-week and 13-week deferred periods being the most common, making up roughly 70% of these cases. Encouragingly, income protection now features in five of the top ten most popular multi-benefit combinations. Just a year ago, it appeared in only three.
From a practical perspective, multi-benefit and menu plans bring a number of advantages. As Gemma Sawyer from Switch Financial Services explains, it starts with understanding the client’s individual needs. Once that’s clear, protection elements can be bundled for greater efficiency and value, rather than taking a blanket approach.
That said, menu plans aren’t always the right fit. Some clients – for example, those with manual jobs, those who smoke, or those in niche professions – might be better served by specialist providers or friendly societies. In these cases, a hybrid approach can work well, with income protection taken separately and other cover types put together
The most important part of the process is communication. Clients don’t always need to understand the technical differences between menu and standalone plans, but they do need to feel confident that what’s being recommended makes sense for them. That clarity builds trust and helps them understand the value of the protection you’re putting in place.
Looking ahead, there are both opportunities and challenges in growing the use of multi-benefit solutions. Pricing pressure continues to affect provider margins, and there’s still work to be done in helping advisers feel confident using these structures.
Ultimately, the move towards flexible, personalised protection planning is a positive step. As mortgage terms lengthen and people live longer, protection needs to keep up. Menu and multi-benefit plans allow advisers to build solutions that can adapt with clients through life’s changes, rather than staying locked in the past.
