"With almost 20% of home occupiers now privately renting, many Gen Zs won’t have the protection conversations that they might have done if they’d got a mortgage earlier."
The simple answer is yes, but perhaps not in the way you might think.
For those with employers that provide access to group risk - employer-sponsored Life Assurance, Income Protection (IP), or Critical Illness (CI) - the need for protection conversations largely falls away since their employer has already done the job. The same goes for those employed by the public sector or corporations that provide these benefits but don’t insure them.
If employees don’t have these benefits, making their own provision is vital. But, for those in privately rented accommodation, the prompt to do so is often elusive and many don’t stop to consider that they need to pay rent regardless of whether they lose their income as a result of prolonged ill-health or injury. So, how can group risk be leveraged to prompt those conversations?
“The obvious route is via employers.”
Some might be open to making group risk provisions for their staff, in which case, the usual rules of engagement apply - employers seek advice on benefit design and cover levels, either aligned to their goals and contractual obligations or merely based on good practice, and the adviser helps them search for competitive terms before putting the benefits in place.
Sadly, some employers may not be tempted by access to embedded support services for the health & wellbeing of their employees nor by the savings and improved productivity that could be achieved - especially for SMEs that might not otherwise have access to these services.
“For these employers, there are some alternative approaches that advisers could put forward for consideration.”
The first is a simplified arrangement whereby, rather than a multiple of salary, a modest fixed rate benefit is provided for each employee. This is a far cheaper alternative and could meet the protection needs of renters, whilst enabling them to focus on what is important to them – namely affording a roof over their heads.
Another option could be a voluntary arrangement whereby the employer facilitates access to group risk benefits but may not pay for them. They would still seek advice on benefit design, competitive terms, and implementation but staff would pay for some or all of their protection via payroll deductions.
“The employer has done the heavy lifting, and staff gain access to protection without personally having to take financial advice or worry about affordability, good value and the cost of advice.”
A slight variation on this option is a flexible benefits arrangement. This could work if employers are prepared to fund a basic core level of cover and have access to a benefits platform to manage the arrangement.
A final alternative approach could be to partner with other employers - perhaps through local or national business groups - to bring regulated specialist individual protection advice to their employees. This could work in a similar way to a specialist-to-specialist partnership. For example, partnering with a wealth management adviser.
Employers would need to carry out and document regular due diligence on the adviser and make it clear to their employees that the selected adviser is not the only option available on the market.
“Likewise, employers should state that they don’t personally endorse any independent advice provided by the adviser and will not be liable for the advice.”
Whilst this might not be the most attractive option for employers looking to minimise involvement, it could still be a viable way to facilitate access to protection conversations.
One thing’s for sure, whichever route is taken, employers can play a crucial role in starting much-needed protection conversations amongst Gen Z renters.
