How to reduce the cost of premiums

This article is part of
Guide to financial resilience and protection

Farrell explains: "Payment breaks can offer relief without clients sacrificing their cover. These are offered a month at a time, for up to three months, with no requirement for premiums to be made."

Key take-aways

Before the client asks to reduce or to surrender a policy, intervention throughout the year is advisable. This could include the occasional client newsletter or social media links to articles discussing the importance of protection at a difficult economic time.

Things to remember:

  • Reduce the payout amount; reduce the cost.
  • Lengthen the deferred period.
  • Consider short-term IP plans for some clients.
  • Look at alternatives to full CIC – perhaps consider core conditions plans instead.
  • Assess all areas of a client's finances, including employer benefits, investments and the mortgage.
  • Explore whether there is a change to smoker status.
  • Keep in regular contact with clients and providers.

On this last point, Paterson adds: "Making sure your clients continue to understand the need for protection is also important, but it may be worth carrying out a review to reinforce the need for the protection, and ensure the level of cover and premiums are appropriate and affordable."