In the good version, clients, insurers, and advisers increasingly recognise the value of having some cover, even if it isn’t the best or most extensive.

By bringing more lives to the market, the product profitability gradually improves, premium increases are moderate and one-year or two-year cover at between 50% and 60% of income to cover a home loan and standard expenses get sold in much higher numbers.

If this kind of IP cover took off, we could see sales double. It would add some much needed ‘true new’ premium to the industry and take income cover from a modest 20% of the market up to something more like 60%.

Most of the balance of the risks are already well covered by savings, early retirement, and costs are met in-part by trauma and medical insurance.

The other future is not so good.

In this version the government launches an income insurance scheme which effectively nationalises the best part of the IP market.

The scheme is budgeted to cost about 2.7% of wages yet a comparison with insurers' experience suggests that is a substantial underestimate. Are we sure that $3 billion annually couldn’t be better spent elsewhere?

But say they press on: consumers lose that income; the market loses from $140 million to $240 million of premium. That in turn drives two more negative changes: longer term IP premiums must rise further due to the loss of the most profitable slice of the premium pie, pushing more and more people out of cover.

Advisers take a hit too: the renewal commissions lost range from $10 million to $15 million annually.

Everyone has a slice of the blame to themselves, whether it is insurers over generous policies, government intervening in the IP market to take the most profitable slice of the pie, research businesses (so that’s me covered) or those advisers pushing only the most comprehensive cover or no cover at all.

We end up with a market where personal IP cover almost ceases to exist while we have a state scheme the keeps getting more expensive because it has no capacity to select risks, underwrite, vary premiums, or manage benefits.

A middle path would be most desirable. To explore what that looks like it probably requires acknowledgement that medium to long-term sickness (which is what IP mostly pays for) is fundamentally different to redundancy and accident insurance.