Being the heroes in the middle
Malcolm Davidson (pictured) is director at UK Moneyman
I have recently been dealing with a mum of three who was sadly diagnosed with breast cancer.
Fortunately, she did have critical illness cover in place and was able to pay off a personal loan and the majority of her mortgage.
I have only just met this client, so it wasn’t me who arranged her policy, so I asked her how she came to take out this cover.
She told me she couldn’t really remember how she came to take it out, only that her previous adviser told her he thought it was a good idea, so she went along with it – as simple and straightforward as that really.
The adviser did a great job of course, at the point of claim she was a single mum on a low income and the claim pay-out was literally the difference between her keeping a roof above her family’s head at a traumatic time for all involved or certain repossession.
Legal & General have recently been raising awareness of the great job we do out in the field with their “Heroes in the Middle” campaign.
It’s great to be able to tell stories like this one when you have a client who is undecided about whether to take out cover or not, especially if they are suspicious about “nasty” insurance companies who look to decline claims.
Can we all say that we give all clients the opportunity to buy protection 100% of the time? It’s mortgage customers that shout the loudest and without a process in place, sometimes protection can slide by the wayside when there are too many plates to spin.
As advisers, perhaps we can sometimes make assumptions about clients’ willingness to buy protection, for example if they work in the public sector with 12 months’ sick pay.
In my experience, it’s these very clients who have generous workplace benefits that are keen to take out Income Protection insurance.
They really value the free sick pay they get from work and when they realise it is usually inexpensive to take out Income Protection with a 12 month deferred period they tend to say yes.
In their mind, for maybe £20pm (a £240 per annum notional “pay cut”) they have just extended their sick pay from one year to say 25.
Given the choice of two employment contracts when they took the job, contract one with 12 months’ sick pay or contract two with 25 years’ sick pay at a marginally lower salary then most would surely go for the latter.
Often the premiums for protection are quite high. It’s a mistake to assume all customers won’t take out cover though. The price is the price for a reason.
If an insurer is quoting £100pm to cover a risk, it’s only because their statistics suggest there is a high chance of a claim.
I think customers understand this – for example they know their car insurance used to be cheaper when they were 18 before they proved themselves as a safe driver. Policies are simply priced to the risk.
Some advisers are fearful of a rejection or objection – good advisers welcome this as a starting point.
Often a client asks to “think about it”’ A simple follow-up question to this reaction is “Is it the cost that is putting you off?”
Watch the client breathe a sigh of relief when you say that!
Tell them that’s a reaction a lot of clients have when they see the cost of the cover and you will work with them to find a more affordable solution.
Compromises can be made and there is usually a plan out there to suit all pockets.
It’s up to the client to decide how much to spend on their protection.
Imagine if the client above had not been offered the cover on the basis that the adviser thought “she can’t afford this”.
She did see it as a priority and her policy turned her fortunes around.
Let’s all try our best to be “Heroes in the Middle” and make a difference to our clients’ lives every day.