There are a number of tools out there that really demonstrate the value of income protection.
Legal & General’s Deadline to Breadline calculator is an online tool that can assess your client’s income security.
You add the client’s monthly bills and luxury spending, for example £800 and £300 respectively. There is also a list of state benefits a client can access: statutory sick pay, employment support allowance, personal independence payment, widowed parent’s or bereavement allowance.
You can also include additional income: sick pay through work, investments, child allowance benefit and any income protection policies.
For this example, I have said the client will get SSP and is eligible for ESA; including savings of £1,500.
Using the details above, the calculator shows the client could be on the breadline in 10 weeks.
If unable to work due to ill health, they have less than three months before they start to significantly feel an impact from their income dropping.
The calculator measures how long a person’s income, savings, sick pay and state benefits will sustain them, before they can no longer cover monthly expenses.
This tool is really worthwhile for advisers.
Kathryn Knowles is managing director at Cura Financial Services
