Why protection underwriting matters

  • Describe what underwriting is
  • Identify the skills needed when advising on protection
  • Describe the most common conditions that require further underwriting

The key to helping clients to be open and upfront is for advisers to be equally transparent; about things like how long the fact find process typically takes and why certain questions are being asked.

“As advisers, we often say things like ‘It’ll only take a few minutes’ as a means to get our foot in the door at the beginning of a conversation, but the health/hobby/occupation part of the call is arguably the most important component,” says Ben Burgess, senior adviser and protection specialist at advisory firm LifeSearch. 

“Explain to your clients that certain disclosures can very much impact premiums and determine insurer selections and that you’re only asking because you want to find them the most comprehensive and cost-effective provider to meet their individual protection needs.”

Managing price expectations at this stage is important, says Alan Knowles, managing director at Cura Financial Services.

And it is crucially linked to that health/hobby/occupation section. “Ask some medical questions. Ask if they ride a motorbike or do any hazardous sports. You don’t want to tell someone that cover will cost £20 a month only to find after underwriting that it’ll be £60 a month. It would be better to suggest it would be £60pm upfront and manage their expectations.”

Questions around lifestyle, in particular, tend to have high levels of misrepresentation, according to David Banks, underwriting and claims director at Legal & General.

He adds that the adviser can help by stressing the potential impact of misrepresentation in line with such questions and asking clients to carefully consider their responses, check their answers and correct them if required.

If and when a client discloses a condition during the fact find, advisers should make sure they find out everything they can at that stage, before moving to an actual insurance application. “Finding out at your first meeting is ideal so you can manage their expectations throughout their journey. Don’t be afraid to ask,” comments Robyn Allen, director and adviser at Robyn Allen Solutions.

Doing this allows advisers to utilise pre-underwriting services, to ensure they have a well-informed client ahead of the application process, adds Allen.

There are a range of solutions in the protection industry that can provide indicative underwriting and pricing decisions before the application is submitted – from insurer pre-sales helplines and online tools to independent portals. Using these can help save the adviser and the insurers a lot of time and save the phone calls for the more complicated cases, says Knowles.