Raising the subject of family protection

At the start of any meeting, Mr Hamilton says the adviser should outline what he or she is going to do. This involves gaining permission to ask challenging questions and explaining that this is so they can provide the right protection advice.

Mr Hamilton says: “Establish what protection plans the client currently has. What does having these plans mean to the client? How important are they? Question where they would ideally be financially if the unthinkable should happen?

“Test the importance of their answers by asking: ‘How important is that to you?’ ‘Why is that so important?’ ‘How are you going to achieve this?’”

A simple exercise is to look at any client’s monthly bank statement and ask how any shortfall would be met if they or their partner were to die or become seriously ill.

Louise Colley, protection distribution director for Aviva, says every adviser should remember that nobody likes talking about death and illness.

She says: “Taking about death and illness is difficult because people like to think that bad things won’t happen to them.

“Talking to your client about what makes family life special creates a much more positive conversation and triggers the desire to ensure it can go on no matter what the future holds.”

Ms Colley points out just as it is never too early to talk about protection it is also never too late and therefore advisers should keep in touch with their clients to keep track of any changing protection needs.

For example, if people move house, have children, or begin or end a relationship then protection needs should be examined.

Aviva Family Finances research found around two-thirds of separated parents who receive maintenance from a former partner rely on this income - but many are unsure whether their former partner has protection in place.

She says: “Family models are many and varied nowadays, so it’s important to consider all aspects of financial support.”

If objections are raised like will the cover kick in when it is really needed, Ian Smart, head of product development and technical support of Bright Grey, points to statistics showing that today around 90 per cent of claims are paid on average each year.

Figures from the Association of British Insurers show that £6m a day is paid out in life cover, income protection and critical illness claims.

Plus some policies do not just offer financial support when required. Mr Smart points out some policies have added value support services that offer emotional and practical support and bereavement counselling.

He says: “People are more likely to suffer a critical illness than to die before retirement so providing critical illness cover in addition to life insurance provides additional peace of mind.

“Less severe critical illness cover is now being provided in recognition that there are financial needs before a condition becomes critical. And this type of cover typically doesn’t reduce the main critical illness cover which would remain in force.”

On the issue of cost, Mr Smart says the products are flexible enough to provide cover to suit any budget and can adapt as a family’s lifestyle changes.

Mr Smart says: “If your client’s budget for protection insurance is small, you may be able to provide them with a small element of cover, for example the amount of their annual salary, which will provide a safety net for a year should they become ill and are no longer working.

“When their circumstances change or as their family grows they can add more cover.”

He says £20,000 worth of life or critical illness cover can be obtained for 25 years for a 35-year-old (non-smoker) for as little as £8.30 per month.

But ultimately the biggest downside is that critical illness policies and income protection only pay out on the illnesses or conditions covered. If your client’s condition doesn’t meet the definition their claim won’t be paid.