Only a small minority of UK adults have protection to cover their health – as such, there’s considerable room for expansion in protection sales.
Existing clients are just as big a potential market as new clients, so it’s worth discussing protection with existing clients to see if there are any protection gaps to be addressed there.
While the figures are much better for life insurance, the data still show less than half the population has life insurance.
This is especially concerning given outstanding mortgage debt in November 2018 stood at £1.4trn – how would your clients cope with a sudden loss of income?
Expanding fact finds
First and foremost, protection needs must be included in the fact finds that take place before a mortgage is considered.
Go beyond assessing the loan as affordable and establish whether mortgage protection would also be affordable alongside repayments.
Without protection, the mortgage risks default should the debtor be off work through illness or injury or even passes away, which could mean financial ruin for the individuals involved and does not reflect well on the adviser.
Another aspect of the fact find that’s important is ensuring the process – including any protection sale – is seamless.
It’s worth doing some roleplays to ensure the sales structure flows and leads fluidly into a conversation around protection.
This might involve asking open questions, getting the client to realise for themselves the risk they face, coupled with the use of technology such as LV’s risk reality calculator to make them more aware of the actual risks they face and their protection needs.
Nothing off the table
Mortgage advisers are often very familiar with life insurance and critical illness cover; this is typically what’s been sold historically to protect mortgages.
However, many working adults could be better served with separate life insurance and income protection.
Often this can mean more comprehensive and cost-effective cover, not least because income protection is designed to pay out should anything medically prevent mortgage holders from working. This is opposed to critical illness cover, which only pays out if the condition is listed in the policy terms.
Considering all options adds another string to mortgage advisers’ bows when it comes to ensuring clients are protected should they be unable to earn an income.
If you’re looking for in-house expertise, it’s important to have someone who can lead on protection. Upskilling your advisers with a qualification such as Cert CII Health & Protection is a good start.
It’s worth considering the benefits of bringing an independent adviser on board rather than a tied one so you get a whole of market position that allows you to help as wide a range of clients as possible.
This could be particularly beneficial where the client has a pre-existing condition.
Often it requires a thorough search across the entire UK market to find appropriate cover for such individuals.
Of course not every mortgage adviser is inclined to sell protection and, should you prefer to focus on mortgages, it’s essential you have a good outlet for making referrals for protection business so you don’t miss out on the opportunity.
First, as mentioned, independence is hugely important.
This will ensure the best possible outcome for clients and may even mean that the client can get protection where this would not have been possible without whole of market advice.
Second, consider the transparency with which the firm will deal with your clients.
It’s essential you can keep track of your clients’ protection status once you’ve referred them.
Portals which allow partner firms to see how their referrals are being handled, the current status of the advice and pending payments are one way of doing it.