Q: How should I address objections?
It is human nature to raise any number of reasons not to spend money on something that isn’t tangible and appears to offer no immediate benefit.
The value and peace of mind of having protection in place is a good start.
If a client has a particular reason for not needing protection then Jennifer Gilchrist, senior product development manager of Bright Grey and Scottish Provident, said these would need to be considered individually.
In general, she said talking through the consequences of sudden death or having an illness and how this will affect daily living from a financial perspective, highlights to clients some areas they may not have considered.
While not wanting to scare or upset your clients, Ms Gilchrist said pointing out the chances of the big three illnesses happening to them can bring the need to life.
She said: “The chances are they will already know someone who has suffered cancer, a heart attack or a stroke.”
* A main objection raised is “Someone else will step in to provide.”
Often Ms Gilchrist said clients cite state provision as a reason for not needing protection – pointing out the level of support provided by the state often brings with it the realisation that they would need additional support.
Help from the family is also relied upon although how much support could be provided may change over time and Ms Gilchrist warned it needs to be considered whether that help would really be available long term.
She said: “Most clients would not wish to burden their family, and this is where protection cover comes into its own.”
Louise Colley, head of protection marketing at Aviva , said state support was quite limited.
A person whose husband or wife dies may be entitled to some support from the government depending on their situation, but these are by no means substantial sums.
For those eligible, Ms Colley said in 2011 a bereavement payment provides a one-off tax-free lump sum of £2,000 – around a monthly income for the average family.
Bereavement allowance and widowed parents allowance may offer a level of financial comfort to some people, but only if they meet certain criteria.
These payments provide a maximum of £100.70 per week.
In the case of bereavement allowance, Ms Colley said this is payable only for 52 weeks.
So she said these sums by themselves are unlikely to cover the cost of raising a child.
Similarly should a person find themselves unable to work due to illness or injury, Ms Colley said in 2011 employment and support allowance offered a maximum of £67.50 for the first 13 weeks and up to £99.85 after the fourteenth week.
With the sickness absence review underway to combat the 150m workdays lost to sickness absence each year, again Ms Colley said this suggests that people should not depend solely on the government for support in the event they find themselves unable to work.
* Another common objection is “I will take out a protection policy later.”
The later your clients take out protection the more it will cost, Ms Gilchrist warned.
Also she said a client’s health could deteriorate at any time so getting protection as early as possible could ensure a more cost effective and affordable premium.
Ms Gilchrist said: “Protection normally comes with additional benefits such as children’s critical illness cover at no extra cost when your client buys critical illness cover.
“These added value benefits need to be considered alongside the benefits from the main protection cover.
“Illness can strike at any time so there is no time like the present.”
* If I never need it, this is dead money.
Ms Gilchrist said advisers should point out you could actually say this about car insurance but everyone has this.
Protection is no different and could prove to be just as valuable if not more so to your clients than car insurance.
She said: “If your clients don’t buy protection do they really want to gamble with their and their family’s health and wellbeing?
“Protection cover is not that expensive and providing a little bit of cover will help towards financial protection should the worst happen.”
Looking at the critical illness claims stats, Ms Gilchrist said these demonstrated that illness and premature death can happen to anyone and having a financial safety net in place was invaluable.
Some protection cover has additional benefits such as helplines that give clients access to legal, medical and counselling support without claiming under a plan, she added.
* Too expensive:
Protection insurance premiums have never been so cheap, according to Ms Gilchrist.
They have been reducing in recent years and so it is best to get cover now, she added.
Ms Gilchrist said: “There is a perception that cover is expensive but it can be tailored to individual needs including the budget available.
“It is not as expensive as everyone perceives and if your client can’t afford all the cover you think they need, most menu protection plans will allow them to increase cover when they can afford to do so, after they have set up an initial plan.”
Protection can be set up with small amounts of cover to fit even the smallest of budgets a family can afford, she added.
Family income benefit – benefit paid on a monthly basis is also provided which allows cover at a more affordable price.
Ms Gilchrist said: “An adviser would be able to help make sure the right cover is put in place at the right price to suit any budget.
“Look how much the daily cups of coffee costs – have you ever added up what you send in a week or month?
“If your client only put half of this amount into a protection plan, they would be surprised how much cover they could have.”
* I want to shop around.
Shopping around is a good idea to make sure your client gets the right cover but an adviser will make sure they consider the cover available in the market and what products best suits their client’s needs.
Providing protection cover can be complicated and an adviser can help a client make the best choice as they understand the value of the products and what would best suit a client individual needs, according to Ms Gilchrist.
She said: “Your client can do this themselves but cheapest doesn’t always mean getting the best cover.”
* I don’t want to think about death/losing my job.
Nobody wants to think about the worst but unfortunately it is a fact of everyday life.
Once an adviser gets talking about protection, Ms Gilchrist said it is easy to see the value and put aside the unpleasantness of thinking about illness.
She said: “Peace of mind and security will replace any doubts once cover is in place.
“With unemployment now exceeding 2.6m, it is better to be prepared.”
Ms Colley said it was understandable that clients do not want to think about unpleasant scenarios but not thinking about something does not mean that it will not happen.
Simon Wilkins, protection proposition manager of Zurich UK Life, said overcoming issues is best accomplished by listening to your clients’ opinions and helping them to think differently – and positively – about the question of protection.
Most successful protection advisers will do this as a matter of course using an effective fact-finding process, he added, capturing a detailed income and expenditure breakdown and therefore understanding where and why the client spends their income – their lifestyle.
The whole protection discussion then takes place in terms of preserving their lifestyle and that of their loved ones if applicable.
If the discussion is had up front, Mr Wilkins said often clients will not feel the need to object when you present your recommendations.
Mr Wilkins said: “If you do end up in this position then remember handling objections need not be complicated or confrontational if you adopt a simple step-by-step process.”
Step 1 - Acknowledge the objection
It is important to recognise that however valid or invalid any objection may seem to you, it will always be valid in your client’s eyes.
The first stage of handling any objection is to acknowledge that your client has an objection and gain their approval to discuss it further.
For example: “I see how this is important to you, let’s take a few minutes to discuss this so I can fully understand your concerns and see if we can work through and resolve them?”
Step 2 - Understand the objection
It is important to understand if the objection is the only reason stopping your client or are there other objections or areas that also need to be covered. Often an objection given by the client hides their true concern, according to Mr Wilkins.
Step 3 - Answer the objection
Recap on the specific issues that your client has raised and answer them where possible.
Step 4 - Confirm the client’s understanding and agree how to proceed
Ask your client for their response to your answer, for example, has their objection(s) and concerns been answered?
Do they still feel there is an issue or can you move forward?
If the objection has been handled successfully, Mr Wilkins said then you should agree how to proceed.
If not, does the objection need further handling or clarification?
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