Protection Update 17th December 2021
Protection Update 17th December
Hello everybody and welcome to this week’s protection update – Friday 17th December.
We’ve got one more week to go before Christmas, so how are your plans faring up?
For us at the network, there is still a lot to do before we hit the inevitable point at the end of next week where we all stop and take a break over the Christmas holidays.
But what’s happening right now?
Perception and reality?
Well, I got an email from Rob Woolfe from RAW Mortgages last week and there was something in there which I thought was interesting…
Rob is in the middle of arranging residential mortgage and the client is single, but his mother will be living with him but won’t be on the mortgage.
Rob says he spoke to Nat West to understand what their process was in the situation the client/the mortgagor died before his mother and during the mortgage term.
Nat West said the first thing they will want to know is details of life cover on the mortgagor. They want to know that because they would want the mortgage to be settled which is obviously a very simple objective and my immediate thoughts went down a thought process of how you would set up a policy solution, make sure there is a Will, a Trust on the life assurance or should we consider life of another instead etc etc.
But if you take it back to basics, the lender wanted to know about the life cover. Why? Because that’s the most obvious vehicle to repay the mortgage loan.
Obviously, in this country, that’s still a choice that a customer can decide. Do I take out cover, or do I not?
If you hop across the water to Ireland; Mortgage Protection is mandatory with a mortgage. If you’re under 50, you should take out mortgage protection with a new mortgage.
So, what should the perception look like in Ireland if you’re taking out a new mortgage?
You have to have life cover because that loan needs to be paid back. If you’re alive, you’ll be able to keep up with your mortgage payments (probably?) If you die, you won’t be able to so the rules are that you should take out cover so that repayment of the mortgage can happen.
I’d like to see something like that back over here again. We used to have assignments a few years ago.
But what’s your house view in your business with regards to the process you go through with your clients? What I’m asking is whether you manage the expectations of your customers and do you signpost what’s going to happen now and a bit later on down the process?
Are you assertive and do you make it clear that as a responsible business, you expect all of clients to at least consider the risks associated with taking out a mortgage?
That means a conversation with you.
What Risks are we talking about?
You home may be repossessed if you can’t keep up repayments on the mortgage.
Is it fair to assume clients don’t want that? I think it is. Nobody wants to lose their home.
But looking at the sales process generally speaking; do your clients want to go off road and be recommended something that nobody else has ever done? Or do they like safety in numbers? What other customers do – people just like them do? Common sense?
How you frame things is super important. How clients receive messages is also super important because that can set out their perception about what they need to do and what things need to be addressed.
In Robs client situation, it was just interesting to see the client reaction to what Nat West said they would instinctively ask for – life cover. It made it sound like a no brainer and something they would expect the client to have in place.
Sliding Doors with Aviva
Have you seen a film that came out in 1998 called Sliding Doors? It stars Gwyneth Paltrow and it’s set in London and the central idea shows two different story lines of what happens when she gets on a train and what happens when she misses that same train.
The story shows how that single moment of missing the train, or getting on the train leads to two very different outcomes in the main characters life – one good and not very good.
Well Aviva have just released some sales aids which remind me of that film and the first one is called the difference income protection can make.
I’ve put a link to that in the protection update and if you open it up, it starts with the same people but in two parallel timelines.
You see Joe – one with Income Protection and the same Joe without any cover and it looks at the next six months of what could happen if he suffers an accidental injury leading to six months off work.
You see the sick pay he gets from his employer.
How much he gets from state benefits.
His need to start using his savings just to make ends meet and so on.
The other sales aid talks about the value of protection and how protection can help to improve the financial resilience of your customers.
That means avoiding the serious impact of what could devastate us financially.
The sales aid has some of the latest numbers in terms of how much it costs to live in this country. It’s expensive and things are on the rise, so that’s another good sales aid to take a look at.
The future of Protection Insight Podcasts
And just as I wrap things up for another week; there isn’t a protection insight podcast, but can you let me know if there is something you would like me to investigate for you.
Is there a product out there you’ve just not got your head around?
What about a tool or system?
If you let me know, I’ll get it done, but I will scale back the amount of protection insight podcasts next year. I’ve earmarked around 20, but that’s on top of these weekly protection updates which I will continue each and every week.
Have a good week next week and I’ll speak to you once again, on Christmas eve, next Friday!
