Tracey Boyd – Managing Director, Mortgage Hub Expert
Lately, I’ve been writing more income protection policies with Friendly Societies and Mutual insurers. This isn’t a coincidence – more advisers across wealth, financial, protection, and mortgage sectors are turning to these providers.
But why? Let’s break it down.
What Sets Friendly Societies & Mutuals Apart?
Unlike mainstream insurers, Friendly Societies and Mutuals are owned by their policyholders, not external shareholders. This means:
- They put members first – The focus is on delivering fair value and claims outcomes, rather than profit margins.
- They’re built on strong ethics – Many have been around for over 100 years, originally established to help people in times of financial difficulty.
For example, a client of mine, a self-employed builder, was recently declined income protection by a high-street insurer due to his occupation risk. However, a Friendly Society took a more personalised approach to underwriting and accepted him, ensuring he had the cover he needed.
Why More Advisers Are Choosing Friendly Societies & Mutuals
In my experience, there are four key reasons these providers are gaining popularity:
- Underwriting Flexibility
Many Friendly Societies assess cases individually, making them a great choice for clients who don’t fit traditional underwriting models.
I had a hairdresser with mild asthma apply for cover. A big-name insurer significantly increased the premium due to her medical history. A Mutual insurer, however, looked at the severity rather than the condition itself and offered a more competitive rate.
- Competitive Pricing
Since Friendly Societies don’t have external shareholders, they can often offer more cost-effective policies while maintaining strong coverage.
I recently met with a company director who had been quoted £85 per month for a policy with a mainstream insurer. A Mutual insurer provided similar benefits for just £62 per month, keeping costs low while offering stronger long-term protection.
- Stronger Claims Support
Because their focus is on members rather than shareholders, many Mutual insurers take a more supportive approach to claims, prioritising client wellbeing over technicalities.
A colleague of mine has a self-employed client who was suffering from stress and anxiety, preventing them from working. A major insurer declined their claim on the grounds that it was not severe enough, I had a similar client who was insured with a Friendly Society and not only did they pay out but also offered mental health support, helping the client recover faster.
- Added Member Benefits
Many Friendly Societies now go beyond just financial payouts, offering:
- 24/7 GP access
- Mental health support
- Rehabilitation services
Another client who was a freelance consultant with back issues was able to get specialist physiotherapy sessions covered through their Friendly Society’s benefits – something their previous insurer didn’t offer.
Why This Shift Is Happening
A few industry trends are making Friendly Societies and Mutuals an increasingly essential option:
- Tighter Underwriting from Major Insurers – Some high-street providers are becoming stricter, pushing advisers to seek alternative solutions.
- Consumer Duty Considerations – We must demonstrate that we’ve explored all suitable options for clients, rather than just defaulting to big-name insurers.
- Growing Awareness – More advisers are sharing success stories, and clients are responding positively.
Final Thoughts
If you’re not yet exploring Friendly Societies and Mutual insurers for income protection, now is the time to take a closer look.
For many clients, they offer better underwriting flexibility, fairer pricing, stronger claims support, and valuable extra benefits that mainstream insurers sometimes overlook.
