In our next ‘In Focus‘ article this month, Ken Maxwell, Director at JLHO, explores why younger generations remain under-protected and why the protection conversation needs to evolve. Looking beyond traditional life milestones, Ken considers how advisers can position protection as a key part of wider financial planning and help clients build long-term financial resilience.
The protection gap among younger generations has been widely discussed across the financial services profession for many years. While awareness of personal finance has increased, protection is still frequently viewed as something that can be addressed later in life.
For many people, protection only becomes a priority when they purchase a property, start a family or take on greater financial responsibilities. By that stage, however, financial commitments often already exist and the consequences of illness or loss of income can be significant.
The challenge for advisers is not simply encouraging younger clients to buy protection, but helping them understand the role it plays within long-term financial planning.
Looking beyond traditional milestones
It is easy to associate protection with home ownership or family life. In reality, many younger adults already have financial responsibilities that depend on their ability to earn an income.
Rent, mortgages, personal borrowing, business commitments and future financial goals all rely on continued financial stability. A prolonged illness or inability to work can disrupt those plans long before retirement or later-life wealth become relevant considerations.
Protection is therefore less about age than it is about financial responsibility.
Changing the conversation
Historically, protection discussions have often centred on products and technical features. While these remain important, they are rarely the starting point for meaningful client conversations.
A more effective approach is to begin with the risks clients already face.
What would happen if their income stopped for an extended period? How would existing financial commitments be met? What effect would an unexpected event have on longer-term objectives?
Framing the discussion in this way helps demonstrate that protection is fundamentally about preserving financial resilience and supporting long-term plans, rather than simply purchasing an insurance policy.
Protection as part of financial planning
Protection should not be viewed as a separate financial product. It is one element of a wider financial planning strategy, sitting alongside wealth accumulation, retirement planning and estate planning.
As clients’ circumstances evolve, so too should their protection arrangements.
Buying a first property, establishing a business, entering into a marriage or civil partnership, or becoming a parent all create natural opportunities to review existing provision and ensure it continues to reflect changing responsibilities.
Regular reviews are equally important, as protection arranged many years earlier may no longer provide the level or type of cover required.
Simplicity builds understanding
Protection remains a technically complex area of financial planning, but the conversation does not need to be.
Many consumers are unfamiliar with different forms of protection or the role they perform. Technical terminology can become a barrier if introduced too early.
Clients are generally better served by clear explanations of the financial risks they face before considering the most appropriate solutions.
A straightforward conversation about protecting income, maintaining financial security and safeguarding future plans is often far more accessible than detailed discussions of policy structures or product features.
Advice continues to matter
Digital communication has made financial information more accessible than ever before and will continue to play an important role in improving awareness.
However, protection remains a highly personal area of financial planning. Every client’s circumstances, responsibilities and objectives are different, and determining appropriate levels of cover requires careful consideration.
Professional advice helps ensure protection arrangements are proportionate, appropriate and capable of adapting as circumstances change over time.
Looking ahead
Closing the protection gap will require more than greater awareness of protection products.
The opportunity for the profession is to make protection a more natural part of financial planning from an earlier stage of adult life, helping clients understand that financial resilience deserves the same consideration as wealth creation.
When protection is positioned within the context of long-term financial planning, it becomes easier for individuals to recognise its value and make informed decisions that support both their current circumstances and their future ambitions.
