Get Protection Done

hen Boris Johnson ran his election campaign last year he was very clear in terms of his message. You were left in no doubt about what he wanted to do, and probably how he would go about it. And in the end the majority put their X in the box to give the new Prime Minister his mandate to Get Brexit Done. And on the 31st January it happened. W

The Protection Manifesto

When an adviser sits in front of a customer, and hands over the IDD which gives a clear message “I’m going to get the mortgage and the insurance done”, and the customer elects to proceed, why is it in the majority of cases it’s just the mortgage that’s delivered and not the Insurance? Is it time that we reflect on our duty of care, not just to find the right borrowing to put people in their home, but to plan for the longer term to keep people in their home should the unexpected materialise, to make protection happen?

We know that there is a shift in the borrowing habits of UK consumers; product transfers now account for over one in five transactions and there is a shift from two year to five fixed rates. With this comes risk. Risk that people don’t look at the bigger picture when it comes to their financial wellbeing. Indeed Canada Life ran a survey last year and found that almost Half (49%) of respondents had a change in personal circumstances since taking out their mortgages, but only 45% of them had updated their insurances. That leaves a staggering 55% who experienced a change in circumstances but either did not update their protection or have no protection in the first place, which could make them more vulnerable to a financial shock. Of course we talk about customers but how many would consider themselves a customer if they were to fall ill and found out that if they had had an insurance conversation then the financial impact may have been softened.

Shaun Almond Managing Director

So it’s up to all of us to have the protection conversation as stated in our Adviser Manifesto, we said we were going to talk about protection so let’s deliver on our commitments. In conversations about borrowing, new parents should always consider whether their level of cover protects their family as well as their home; and an existing Critical illness policy must be reviewed to check it covers children.

Customers must be made aware by clear signposting of the support services provided by an insurer including personal nurse advisers, second medical opinions, counselling services or health and wellbeing advice. And don’t forget that increase to a customer’s cover to take into account their changing needs and lifestyle, doesn’t always need a new policy if there is a guaranteed insurability option available.

There are so many questions that can and should be asked to open up a protection conversation, has there been a pay rise recently, a reduction in household income, or a change in jobs which could bring with it a new employers benefit package? A reduction in income may mean the part-time working through parenthood, eldercare, studying, lifestyle choice, or even redundancy.

Does this make them more financially dependent on another member of the household? Has a change in income meant a loss of or the gaining of a valuable employee benefit package or has the customer gone self-employed which brings with it the potential for tax efficient insurance solutions? So many questions where the answer is a protection review. Regardless of the length of your clients’ mortgage deals, what’s clear is that regular communication is key. If opportunities for biennial mortgage reviews are reducing, advisers should be talking about protection needs instead.

So when we hand over the IDD, the Firms’ Manifesto, a document that clearly states what we are committed to delivering, the result is just mortgage advice; Lets make sure we Get Protection Done. 05