In its latest free guide for advisers, Defaqto has found that the number of short term income protection (STIP) products available to consumers has almost doubled in the last 24 months; from 20 in 2009 to 39 in 2011.

Given the current economic environment, people should be conscious of the need to protect themselves against loss of income. As a result, the potential exists for advisers to actively promote the customer-focused benefits of STIP – and indeed long term income protection – which protect people’s lifestyle expenses rather than just their mortgage payments.

Defaqto’s Guide to short term income protection, published today, explains how current conditions present increased opportunity for brokers selling STIP, including:

• The opportunity to up-sell from mortgage payment protection insurance (MPPI) to STIP
• The opportunity to forge links with lenders withdrawing from the PPI market in order to deal with their customers’ income protection needs
• Increased shopping around by consumers generating internet-based leads and creating opportunities to purchase leads from aggregator sites

Ben Heffer, Defaqto’s Insight Analyst for Life & Protection, said: “Despite the well documented problems with PPI, the protection market still offers real opportunities for advisers – and income protection can certainly add value for intermediaries.

“The key is how advisers take advantage of the potential offered by STIP and its longer term equivalent. Protection tends to be bought rather than sold but advisers are well placed to assist consumers by raising awareness of the need for protection and sourcing a package that is right for them.”

“Although brokers selling STIP should be aware of its limitations, it should at least be considered alongside other protection products to offer truly comprehensive cover. Advisers can use our Star Ratings to support their recommendations relating to both short and long term income protection, and to help them understand where a product sits within the wider market.”

Defaqto’s guide also includes:

• Contextualised explanations of the differences and similarities between short term income protection, long term income protection and MPPI
• Analysis of the industry influences driving the increase in STIP products available on the market
• Detailed breakdowns of the various features of STIP products, including cover options, benefit period options, comparative costings, cover eligibility and rider benefits

The guide can be downloaded free of charge at: http://www.defaqto.com/adviser/ifa/guides.

Defaqto’s Star Ratings for short and long term income protection products help advisers understand the overall level of features and benefits offered by all income protection products on the market. Taking a wide range of features and benefits into account, Defaqto has given each product a rating from 1 to 5 depending on how comprehensive they are. Star Ratings aim to support advisers’ recommendations and allow them to understand where a product sits within the wider market.

Advisers can visit www.defaqto.com/star-ratings/income-protection-insurance to access this year’s ratings for income protection.