How to introduce clients to protection

  • Describe the impact of the pandemic on people's desire to buy protection
  • Identify how mortgage brokers can play a part in this process
  • Describe skills needed to advise on protection
How to introduce clients to protection

For most consumers, arranging a mortgage feels both daunting and exciting, as buyers go through a process that will enable them to buy a new home.

Arranging protection cover as part of that process is also daunting, but not at all uplifting, as it involves contemplating financial or physical misfortunes, including critical illness and death, which few of us really want to think about. 

But this is precisely why mortgage brokers should always put discussions about protection at the heart of conversations with new and existing customers.

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These insurance policies could protect customers and their families from financial catastrophe – and during the past year, the Covid-19 pandemic has provided a powerful reminder that such risks, from unemployment to premature death, can affect anyone.

There is a moral obligation for advisers to ensure customers are protected against the worst happening, as they take on what may be the largest debt of their lives. 

However, recent research from the Association of Mortgage Intermediaries (AMI) suggests many consumers have a limited understanding of the different protection products they may need – and many are also cynical about insurance providers’ willingness to pay out on claims. 

That makes it even more important that advisers have carefully structured, frank discussions with customers, to explain the purpose of protection and the possible consequences of not having the right cover in place – and to dispel the pernicious myths sometimes linked to these products. 

Protect customers and increase revenue

Brokers who are not currently in the protection market are also missing a valuable opportunity to add an extra dimension to the relationships they have with their customers.

An adviser with expertise in the discussion and delivery of protection cover, tailored to meet customers’ needs, will enjoy longer-lasting, more profitable relationships with their customers.

The protection market also seems certain to continue to grow over the next few years. One likely consequence of the pandemic will be an increase in demand for income protection cover during the next two years, as government support for both employers and the self-employed is wound down – and more self-employed people seek such cover for the first time.

The pandemic has also encouraged insurance providers to launch additional services, including access to medical support for physical and mental health – opening up further opportunities for advisers. 

Mortgage brokers who can offer customers effective guidance on the purchase of protection covers that meet their needs will enjoy significant commercial benefits, while helping to ensure customers are fully protected against risks that might otherwise plunge them into financial disaster.

Here are some important steps advisers can take towards achieving best practice in this area.

1. Put structured discussions about protection at the heart of conversations with new and existing mortgage customers