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2021: The year specialist protection came into its own – Woods

by: Jeff Woods, head of intermediary development, Legal & General
  • 12/11/2021
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2021: The year specialist protection came into its own – Woods
Taking out a mortgage is arguably the biggest financial decision most people will make in their lifetime, yet the need to protect it is something that often falls through the net.


Amid the chaos of quotes, offers, surveys and bills, insurance is often regrettably overlooked.

The pandemic has shown just how valuable protection is when it comes to the unexpected, however. This is especially true when you consider that millions of households are also seeing their disposable incomes squeezed due to sharply rising energy bills, global supply chain problems and rising taxes from April next year.

Though we did not see the base rate rise that so many industry figures expected, it’s more a case of ‘when’ rather than ‘if’ a rise will happen. In the meantime, all the recent discussion and speculation around interest rates is a fantastic springboard that advisers can use to renew conversations with clients around refinancing and protection.


Brokers’ responsibility

Homeowners cannot risk being caught off-guard by changes in their personal circumstances or the economy – and mortgage advisers have a responsibility to ensure that they’re not. Taking stock of the reasons why clients are reluctant to seek protection will be a key first step in achieving this goal.

Customers’ perception of insurance remains one of the largest barriers to seeking protection. Ultimately, people still do not understand what they are being sold, the different types of cover available, or how these policies can benefit them. Additionally, people naturally veer away from partaking in difficult conversations around death, illness or injury – the things that are most likely to put our homes and lifestyles at risk and make loved ones financially vulnerable.

Whilst protection can minimise the effect of these events, broaching these subjects in the first place often remains a challenging task. Despite this, mortgage brokers need to engage in these potentially difficult conversations as part of their duty to advise. And if it’s not their area of expertise, partnering with intermediaries in this space can bring significant benefits to all parties.


Safety net

Creating an adequate safety net should be a pivotal part of the mortgage selection process.

Insurers have a key role to play here too, as they need to equip mortgage brokers with the right information and the best possible products for their clients. In the end, even if customers choose not to seek protection, the fact that they had the opportunity to make an informed decision is essential.

In the past 18 months, we have all seen how the right cover can offer peace of mind in times of crisis, so it’s important to keep this front of mind as we prepare for whatever storm comes next.

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