Prioritising the protection conversation
Alarmingly, most people continue to run the risk of life shocks without having an appropriate back up plan to help them cope financially, practically or emotionally.
In the most recent AMI protection viewpoint research, we measured consumer awareness and confidence in protection insurance. We’ve found that there’s still some way to go in dispelling the myths that protection isn’t essential, is too expensive and that insurers won’t pay out.
Protection insurance is all about de-risking life; being there when life throws you a curve ball. It’s difficult to get these messages out, but thank goodness for advisers like you who raise awareness of protection and encourage clients to get covered.
Make the protection conversation memorable
Providers supply lots of marketing material and tools to help advisers demonstrate the value of protection. Using case studies to support a protection conversation can help illustrate the benefits for customers who have claimed, as well as positioning the potential impact of not having cover in place. The AMI research revealed 86% of advisers surveyed had asked their client about Income Protection. However, only 30% of customers recalled their broker asking them.1 By making the protection conversation more memorable with the resources available, we could really start to see an increase in customers perceptions.
Dealing with misconceptions
Protection doesn’t have to break the bank. When we asked customers to explain their reasons for not currently having protection in place more than a quarter said they thought it was too expensive.1 But with the different options available these days, you can tailor cover to suit most budgets. With family income benefit on life or critical illness cover and limited payment periods on income protection, no-one should go without cover.
The outcome we want for all our customers is that if they need to claim, we can pay out, and usually that’s the case. We paid 99.6% of claims in 2020, helping nearly 86,000 customers and their families.2 When we look at why certain claims aren’t paid, the reasons are largely people not being truthful about their past medical history and not meeting a policy definition. But this last one doesn’t mean it won’t pay out in future if an illness progresses. And an adviser who understands the importance of disclosure can make a real difference in helping the customer at the application stage.
When to have the protection conversation
It’s easy to let protection conversations end up taking place at the moment when major life events are in progress, for example buying a house or having a child.
Instead of trying to compete to be front of mind at such a busy time for the customer, some advisers’ business models introduce the idea of protection ahead of the event, or even revisit after it has happened.
When your clients buy a house, disposable income will probably be restricted because they obviously want to achieve the maximum loan possible. So perhaps coming back to assess the level of protection once the dust has settled could help them take a sensible and realistic approach to making sure they cover their biggest risks, and manage them for the long term.
*AMI protection viewpoint 2021, 2 – Royal London claims statistics 2020