Government plans to reduce the number of state disability claimants by 500,000 will lead to an increase in group and individual income protection says Canada Life Group Insurance.
Last week work and pensions secretary of state Iain Duncan Smith confirmed that the government is planning to publish eligibility criteria for the new Personal Independence Payment, which will replace Disability Living Allowance, in the autumn.
The DWP says all 2m people currently in receipt of DLA will be assessed by medical experts for eligibility for the new benefit by 2016.
Paul Avis, sales and marketing director at Canada Life Group Insurance says the changes should lead to an increase in demand for income protection both through the workplace and from consumers directly.
Avis says: “ This announcement from the Government provides further confirmation of a continuous campaign for the reduction – or in some case removal – of State support and benefits. Disability living allowance is only one component of support that is available from the State, yet this move alongside welfare reform on core benefits such as the Employment Support Allowance (ESA) and those in the Work Related Activity Group has significant implications.
“As a result, we would expect to see an increase in both group and personal income protection policy sales as people realise that State Benefits are becoming more difficult to qualify for and do not provide as much financial assistance as income protection.
“It is becoming even more important that advisers understand that personal and group income protection insurance is a priority, rather than a peripheral, part of personal and corporate financial planning. It is vital that people have a security net in place, to ensure that both they and their family are provided for in the event of an illness or injury.”