How to reduce the cost of premiums

This article is part of
Guide to financial resilience and protection

When it comes to critical illness cover, sometimes the more comprehensive, the more expensive. Therefore it is worth advisers considering products that offer 'core conditions' such as heart disease, stroke and cancer, which can help lower the cost of premiums compared with the full CIC. 

There is also a way of rewarding good behaviour, so to speak. For example, most policies come with exclusions or conditions around people who have smoked or are using nicotine substitutes to reduce dependency, as this FTAdviser highlighted earlier this year.

But it is also worth reviewing a client's policy after any exclusion period should the client become completely nicotine-free. Kerr explains: "The post-sale alteration that can have the largest effect on premiums is amending smoker status.

"If a client, originally set up on smoker rates, has not smoked or used nicotine replacement products for 12 months, then the insurer may be able to amend the customer's status, which usually results in a significant premium reduction."


It is clear being unable to work through illness or injury could have a devastating effect on households, as they will continue to be squeezed financially by the effects of inflation. This is why, according to Mike Farrell, protection sales director at LV, "with living costs increasing, it is more important than ever for people to have protection cover in place".

He says: "Advisers can help by having regular contact with their clients to understand and review their protection requirements."

Farrell notes that if customers are considering changes to their protection cover, LV recommends they speak with their financial adviser, who can "offer alternative options and speak to providers on their behalf".

Paterson states: "Staying in regular contact with your clients is key to getting ahead of any potential problems your clients may encounter, in particular demonstrating an understanding of the challenges they may be facing."

Richardson agrees: "Reviewing cover with an adviser when your budget is stretched is sensible, as advisers can help clients to tailor cover to match their needs and their budget.

"It may be tempting to consider cancelling insurance at a time like this, without realising it might be possible instead to reduce cover or term to save money."

But it is not only communication between adviser and client that comes into play here: communication between adviser and provider is also beneficial.

According to Richardson: "Some insurers have really understood the difficulties people are facing, especially with customers who are vulnerable, and they are prepared to consider payment holidays case-by-case."