“Most of us are highly sensitive when comes to our personal and family health and circumstances,” he says. “While there are tools being developed that can assist identify potential vulnerability, creating a trusted, secure and empathetic environment that enables you to ask open questions of your client is essential to identifying the vulnerability that your client is actually presenting or could do so if circumstances change.”
For Mohammad Uz-Zaman of ADL Estate Planning, trust is vital. He says: “The challenge for a firm and an adviser is to foster trust quickly where new prospects are concerned, especially where there is a need for a prospect to act sooner rather than later.”
Uz-Zaman notes: “Existing client testimonials that have been independently verified, peer reviews and an excellent initial consultation would go a very long way.”
Roy McLoughlin, associate director at Cavendish Ware and founder of the Seven Families campaign, agrees: “The important thing when advisers are talking to vulnerable clients is to have empathy and understanding, especially with Covid and all the new situations it has brought along, [for example] increased anxiety and more mental health conditions (meaning these are no longer such a taboo subject), but this all creates a certain concern that people are not going to be able to get insurance.”
A paradox
McLoughlin points to what he calls a “paradox” of protection for people with vulnerability. By this he means that openness about vulnerability can simultaneously create the anxiety that they they will be refused affordable protection, or still not be given cover at all. Something that should ideally be helpful to a client (being open), can therefore paradoxically lead to them being penalised, much to the loss to their adviser as well.
Yvonne Braun, director of policy, long-term savings and protection at the Association of British Insurers, and a Gain endorser, recognises this paradox, while highlighting how vital and necessary it is for clients to be honest when disclosing conditions, for example, mental health conditions.
Braun notes that “the insurance industry has come a long way in improving access to insurance for customers with pre-existing mental health conditions. However, there is still more work to be done in this area including, importantly, to improve the dialogue around disclosure."
She adds: "Disclosure is an essential part of the underwriting process, which ensures that a customer ends up with a policy that meets their needs. Last year, our annual claims statistics showed that non-disclosure was the biggest reason for claims being declined. It is crucial that customers understand the importance of disclosure in the underwriting process to minimise the chance of this happening.”
Mental health is a particularly wide-ranging area, especially now resulting from the coronavirus pandemic.
