Decreasing term plans not sound protection planning
Phil Jeynes is head of account development at PruProtect
Picture the scene: your partner comes home from the doctor and tells you that he/she has been diagnosed with cancer. What would be your first thoughts?
Thankfully this is not a position I have personal experience of and many of you reading this will likewise, only be able to guess how your mind would work in the face of such devastating news.
What I am fairly certain of though, is that your primary concern would not be your mortgage.
I would expect that first and foremost you would be worried about ensuring your partner is able to get the best possible treatment, giving them the highest likelihood of a full, fast recovery.
This is what protection cover is designed for – giving people choice which, without it, they would not have.
Giving your customers the opportunity to take on whatever illness or condition is affecting them.
Of course paying the mortgage and other bills is crucial and should be a key part of any protection recommendation but to limit cover to only mortgage protection is to ignore the broader picture of what is important: surviving, recovering, getting on with life.
I would love to see the statistics showing what percentage of mortgage protection policies claimed upon are actually used for the purpose they were designed for, I would be willing to wager that almost all were put towards treatment first and finances second.
I am not for a moment suggesting that decreasing term plans are of no use however I would contend that sold in isolation, they do not represent sound protection planning.
When used alongside family income cover, income protection, even another lump sum policy, they certainly do.
Ask your clients to put themselves in the scenario I described above, will they honestly say that paying off the mortgage is what they would be thinking about?
If not, why build a recommendation around that premise?