Your IndustryFeb 7 2013

How to highlight the need for life insurance

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“It is up to the adviser how to approach the subject of protection, however, what I would say is that by bringing it into the conversation as an ‘add-on’ has already devalued it in the client’s mind,” says Kevin Carr, managing director of Kevin Carr Consulting.

“If it does not appear important to the adviser, it won’t appear important to the client.”

Mr Carr notes that advisers use different ways of bringing protection into the conversation including posing ‘what-happens-if?’ scenarios, budget planners, and using recent advertising.

“One of the most popular tips is to ask the client for their employee handbook (most of which are available online) so that the adviser can provide a simple one page summary of all the benefits the client is entitled to from their workplace, as well as what they don’t get.

“This typically highlights the need for protection and other services, as well as acting as a referral tool as clients will often tell their colleagues.”

Peter Hamilton, head of Zurich UK Life’s protection proposition, says it is crucial to understand the client’s expectations from any meeting and their expectation of how it’s going to run. Once the adviser has this information he or she can tailor the approach.

“There are some key questions to be asked which are relevant for all clients. It’s important to talk about their plans for their children and to build their confidence in your understanding of their lifestyle and long-term priorities.

“Clients should be asked about their dreams and aspirations and the point made that protection could help safeguard these from a financial perspective.”

Mr Hamilton says it is extremely important to understand what the clients could care about – protection triggers could be a number of scenarios such as the effect on their children and their future, continuity of home life, protecting lifestyle, protecting the mortgage and looking to the future.

Indeed, Michael Owen, director of Brooks Macdonald Financial Consulting, says advisers need to assess specific factors such as:

• What income an individual or couple needs between them to meet their financial commitments

• What would happen to that income in the event of one of a couple passing away

• Would there be any borrowing that is unsupportable by the survivor of a couple

• What is the most suitable form of insurance to take out to cover that risk; should it be a policy that pays a lump sum or a regular income

• Are there children in the relationship which need to be educated or provided for. How long will that financial commitment last

• Is the insurance you recommend going to be affordable to the applicant

• Is the policy you recommend sufficiently flexible to meet the changing needs of the applicant over time