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Making sure the policy fits

This article is part of
Guide to Critical Illness

During an initial fact-find with your clients you will start to understand their circumstances: what their income is, if they have any dependants, what debts and liabilities they may have and any existing protection they may already have in place.

Advisers should ask their clients about health, family history, occupation and leisure pursuits, according to Alan Lakey, senior partner at advisory firm Highclere Financial Services.

“It is essential to obtain full details of these to assess whether the case is standard or whether discussions with one or more insurers are relevant.”

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Peter Hamilton, head of retail propositions for Zurich, says the initial fact-find is a good opportunity to ask the client how they would cope financially with long-term or serious illness as well as assess what their financial priorities are.

“Clients will naturally have different priorities. Some clients may want basic cover at the cheapest price, others may want to have the most comprehensive cover available with cost not being an issue, and often a blend between the two is selected.

“Clients may prefer a product from a brand they are familiar with or choose a company they perceive to be financially strong.

“Common objections from clients may be they don’t want to go through a rigorous underwriting process, or that they are worried that if they suffer an illness the provider may not pay a claim. Underwriting requirements and claims history will become important here.

Once you have some information on your client’s medical history, you may be in a position to make a judgement on which insurers will provide the best rates and the right type of cover. There are a number of expert research systems, such as Avelo, Assureweb and Webline, which will be able to help you with choosing the best policy for your client’s needs.

Kevin Carr, chief executive of Protection Review, says the best policy goes further than the number of conditions covered and the price. He says what is really important are the definitions used within those conditions.

“All insurers will promote their own product so carry out independent research as well. Portals will provide comparison prices and a range of companies will provide product comparisons including Synaptics, CI Expect and Defaqto.”

If the client has a set budget in mind, Ms Gilchrist says you want to be able to get them the best cover for the amount of money they want to spend.

“The client will be able to tell you if they want their benefits to keep track with inflation, i.e. they increase each year. They may want family income benefit – monthly benefit payments rather than a lump sum payment – and therefore you will be able to pick the providers that are best for this.”

Advisers should check up on a provider’s history on claims paid and on the financial stability of the provider, which Ms Gilchrist says you should be able to source from its website.