It’s worth bearing in mind that an insurer quoting the cheapest premium, assuming standard terms, may offer a significantly higher premium than others once underwriting has been completed.
6. Except where PMI is concerned
The cheapest isn’t necessarily the best where private medical insurance (PMI) is concerned either, but in a market crippled by premium hikes, largely thanks to medical inflation, price really does matter.
To counter costs, directional care plans – offering members a choice of consultants from the insurer’s panel – are gaining traction in the personal market, says Brian Walters, principal of specialist health insurance broker Regency Health.
He adds that such plans will not be for everyone and that a clear explanation of how the process works will be required at the point of sale.
Meanwhile, VitalityHealth this year moved to a “price beater” approach for switch business, says Mr Walters.
Vitality will now undercut the holding insurer by 5, 8 or 10 per cent, depending on answers to medical questions.
“This is a game changer because it all but guarantees that a cheaper premium will be available at renewal,” adds Mr Walters.
7. Promote added-value benefits
A recent poll by Protection Review, which included the views of advisers, insurers and reinsurers, revealed a strong possibility that so-called ‘added value’ benefits could become the core product of the future.
Some 59 per cent of respondents believed it would, 25 per cent said ‘no’ and 16 per cent sat on the fence.
People want to see something for their money, whether they’re claiming or not. And if those things help support health and happiness, it’s a win-win.
“Protection is a reluctant purchase. We are advising clients to commit money to something they hope they will never need to claim on,” says Mr Chadborn.
“Therefore, the reluctance factor will be reduced if the proposition includes added benefits which policyholders can envisage using and getting value from. It also helps with retention.”
8. Start with protection – try not to squeeze it in at the end
Protection should be at the foundation of holistic financial planning, suggests Mr McLoughlin.
“Building pension and Isa pots is vital but what if disaster strikes? Years of hard work could be obliterated in a short period of time as these valuable investments are eroded.”
The same goes for considering the impact of the loss of an income on all other areas of life: from meeting mortgage repayments, to covering household bills and day-to-day expenditure.
If an adviser tags it on at the end of a financial or mortgage review it pretty much shows they don’t really believe in it themselves, so why should the client be any different?
9. Check what cover is already in place (including employer benefits)
