You are here: Home - News -

‘There’s no reason to turn down business because someone thinks they can’t afford protection’

by:
  • 09/03/2018
  • 0
‘There’s no reason to turn down business because someone thinks they can’t afford protection’
Last week John Phillips of Just Mortgages questioned whether brokers should refuse to proceed with a mortgage if the client cannot afford protection and this produced a lively debate within the adviser market.

Writing for Mortgage Solutions Phillips, who is group operations director at Just Mortgages and Spicerhaart, asked if brokers should refuse to proceed with a mortgage if the client cannot afford protection?

David Smith of iPipeline, a service provider to the finance and insurance industry, took this question to the Legal and General Mortgage Club event at the AJ Bell stadium in Salford.

A short video clip was tweeted by Smith, asking four advisers the question which drew a range of responses. (Link to the full video below.)

 

Absolutely

One broker told Smith: “Absolutely. Business is business, refusing it because a client thinks they can’t afford protection – that is, to be honest, foolish.”

He suggested that in certain cases, the client may be incorrect and actually has the wrong protection, so is in need of advice to highlight cheaper or better ways of getting protection.

“There’s no reason to just turn down business just because someone thinks they can’t afford protection,” he added.

 

A matter of affordability

However, other advisers argued that if a client cannot pay for protection, it is clear that they cannot afford a mortgage.

One broker said: “I don’t want any of my clients scrimping to pay their mortgage each month. So there’s always a budget in there for protection.

“You can’t afford protection, you can’t afford a mortgage, simple as that in my view.”

And another highlighted that premiums could start from as low as £6, so it was very rare that protection was unaffordable.

“But would I continue to do the mortgage? Yes I would – but I’d get a disclaimer to say that I pointed it out to them and they declined it,” he added.

 

Rough times

As for Smith himself, he would suggest that some protection is always necessary – because of the potential for unexpected events.

Smith commented: “Personally speaking, I have had the benefit of protection already assisting with my mortgage – I was diagnosed with cancer a few years back and knowing I had critical illness cover really did help us through some tough times.

“If we didn’t have it, it could’ve been catastrophic. So I’m biased now – I certainly would suggest some cover is always needed, even if it’s just one or two years’ salary to see you through the potential tough times.”

 

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
Cambridge
Cambridge Building Society sees mortgage lending fall

Cambridge Building Society's gross mortgage lending fell 9.3% from 2016, according to figures released ahead of its annual report next...

Close