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Financial peace of mind and the new demand for Value-Added Benefits in a pandemic world

By Ben Wright, Director of Strategic Development at Tenet Group.

The ongoing uncertainty of the pandemic has led to a surge in demand for greater health and financial protection – not least among ‘Generation X’. Against this backdrop, Ben Wright at Tenet Group explores the revival of Value-Added Benefits as a solution:

A traditional problem wrongly associated with Value-Added Benefits (VABs) has been their reputation as unnecessary extra costs. Add to this that most people are asked to take out such policies at the precise time they are watching their costs (when taking out a mortgage for example), and it’s no surprise that many advisers simply overlook this type of policy as it’s not the cheapest on the comparison quotes.

However, this was before the pandemic, and as with everything else, Covid-19 is disrupting the UK financial advice sector. Ongoing uncertainty, increasing focus on health and the growing desire for wealth protection are motivating more people to pursue financial security.

As a result, VABs have rightfully emerged as a desirable source of protection for clients seeking financial peace of mind, and a strong selling point for advisers.

To meet this demand, insurers are now offering specialist products linked to health, lifestyle and property management. Available across plans from life insurance and critical illness to income protection, these products are desirable for both individuals and corporations alike because of the important protection from financial vulnerability they provide.

A range of factors are driving this trend, and all of them harbour an opportunity for advisers to use their expertise to help clients achieve greater financial wellbeing.

Changing outlooks

Ongoing uncertainty being caused by the pandemic is creating new financial pressures for people of all walks of life. Combined with changing life perspectives, this is leading many to think about their futures much more seriously than ever before, with real concerns over reduced income or fears of being made redundant.

Such issues are also observed in the UK mortgage industry, where approximately half a million people have been in rent or mortgage arrears due to Covid-19. Meanwhile, roughly 130,000 households were taking advantage of mortgage payment holidays at the end of last year.

Whilst such issues are no longer new, they do present an opportunity for advisers to show clients they understand their concerns and educate them on the many valuable services available and the important relief they provide.

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