Protection Update 24th December 2021
Protection Update 24th December
Hi everyone and welcome to this week’s protection update – the last protection update of 2021!
Well, we’re getting towards the end of the year. It’s nearly Christmas and despite some of the ups and downs with the restrictions we’ve been living through; it has been a superb year for protection at The Right Mortgage and Protection Network.
We’ve seen more protection sales than we’ve ever done before which is obviously fantastic for you and your business, but also for your clients and their families.
Well done everyone.
When you look at things like Trusts for life cover; we ran a trust campaign in August (which we know is usually a holiday month) and that centered around some webinar workshops and also a series of protection insight podcasts where I sat down with all the main providers and asked them to walk me through the process of writing a protection policy into Trust using their process.
These are all on our protection insights page and you can refer back to them and I’ve spoken to several advisers who have found these podcasts to be a particularly useful reference to guide you through each of those trust form processes.
Well, another highlight for me was when I spoke to Vitality in October; they reported that 55% of Vitality life policies written in September, were written into Trust at point of sale which was a remarkable achievement but obviously, that’s something we need to keep going.
One thing where we have done well, but could do better is Income Protection.
If you look at all policies recommended; around 11% are income protection so that’s an area I’d like to see an improvement in as we start looking forward to 2022.
And the thing is; it’s not difficult to do these days.
If you take a look at the podcast I recorded with Carl at LV=; we demonstrated that if the simple objectives is to make sure your client can maintain their mortgage payments, it is possible to fit some very affordable income protection into the protection recommendation?
Start thinking about Income Protection as a crucial part of the mortgage protection objective. Do it as an addition to the life cover so they can do the thing it says on the risk statement – keep up repayments on your mortgage.
Is some level of cover better than nothing at all?
These days, there are so many opportunities to get your clients access to a personal sick pay solution.
And if you attended the workshops, we ran back in September called “Better Sick Pay Schemes”; you might remember we did a quiz which was all about the risk chance and probability of something happening and I thought I’d revisit that quiz as a bit of fun on this last protection update of the year.
The way it worked was that on one hand we showed the chance of a particular thing happening to a celebrity.
Then on the other; we compared this against the chance of one of your clients going off work sick for 2 months or longer.
The question is; who has the greater odds? Which thing is more likely to happen?
Now for this bit of my protection update, I’ve got the original slides that we showed in those workshops.
Tom Daley – Sports Personality of the year 2021?
So, for each example, it’s the same question each time… Who’s got the greater chance? The highest probability?
Was it Tom Daley winning the BBC Sports Personality of the year 2021 or was it one of your clients; Sally who is female, age 25, going off work sick during here working lifetime which we expect to run to age 65?
Well, we’ve just seen the BBC Sports Personality of the year 2021 play out and Tom didn’t win despite his marvelous efforts at the Olympic Games in Tokyo in the Summer. He won a Gold and a Bronze medal, but alas, not the BBC Sports Personality of the year.
Tom’s chance (as at 27th September 2021) was 15/1 or if you convert that to a percentage; it was a 6.3% chance he would win.
Sally on the other hand carried a 47% chance she would find herself off work sick and could need to claim on her income protection plan.
The person with the higher probability was Sally, your client.
Dan Walker – Eliminated from Strictly Come Dancing on Saturday 2nd October
In this next scenario, we asked what were the chances of Dan Walker being voted off Strictly at the weekend of 2nd October? Dan Walker from BBC Breakfast and football focus…
To be honest, I don’t watch Strictly so I really had no frame of reference other than I thought with him being so tall, he would be a bit awkward on the dancefloor.
According to the bookies, Dan was 7/1 to be voted off that week, but in actual fact made it all the way through to week 11 which wasn’t too far away from the final. As a percentage, 7/1 is 12.5% chance.
Our client on the other hand was Tracy, a 55 year old female who will retire in 5 years when she is 60.
Who had the greatest probability? Was it Dan being voted off that week or Tracy going off work sick during the next 5 years?
It was actually Dan Walker because the chance of Tracy going off work sick was 11%.
Ole Gunnar Solskjaer – Sacked by Manchester United before the end of the season?
The next example we looked at was John, one of your clients who is 30, male, non-smoker, going off work sick before he reaches age 55.
Or was it Ole Gunnar Solskjaer being sacked as manager of Manchester United before the end of the season?
Well as at 20th October, the odds for Ole being sacked were 12/1 which equates to 7.7% chance.
John carried a greater chance of going off works sick at 15%.
Well it seems the final straw was United’s 4-1 defeat at Watford on 20th November and he was sacked the following day.
And remember, your client John actually carried a greater chance of going off work sick in this example!
Emma Raducanu – Winning BBC Sports Personality of the Year 2021?
In this last example we tried to portray a client who looked like they had a decent chance of going off work sick for 2 months or longer during their working lifetime.
The client was Fiona, a female age 31, non-smoker and we ran the analysis up to her 70th birthday.
The celebrity was Emma Raducanu (who if you don’t know is the 18-year-old British Tennis player who won the US Open tournament this year at the first time of asking).
Well, the bookies gave her a 1/12 chance of winning BBC Sports Personality of the year. That equates to a 92.3% chance. And last Sunday (19th December) she actually did win.
Our client Fiona on the other hand had a 48% chance of going off work sick. But that’s still a coin flip chance.
Steve versus Emma?
And in this final example, we’re looking at 2x celebrities. We know what the odds were for Emma Raducanu winning Sports Personality of the year, but were the chances of Steve Bruce being sacked by Newcastle United before the end of the season greater than Emmas?
Well, hindsight is a wonderful thing they say, but if you follow football, you’ll know that Steve Bruce was indeed sacked by Newcastle United.
In fact, I showed this slide during our Better Sick Pay Schemes workshop on 20th October this year, and by the time we got to lunchtime; Steve Bruce was no longer manager of Newcastle United.
The odds of Steve Bruce being sacked were actually 1 to 20. If you equate that a percentage chance, it was a 95.2% chance which was even greater than the odds given to Emma Raducanu.
We did all that a few months ago and I thought it was interesting to reflect back because the bookies don’t often get it wrong.
From a protection perspective; the risk reality is based on the data evidence of real people and it does help put a bit of perspective about the chance and likelihood of someone needing to claim on a protection policy.
I’m sure there have been lots of claims this year and I’ll share some of the stories in the coming weeks and months with you as we get the details.
But, that’s it for another protection weekly update which is in fact the last one of 2021.
I just wanted to say a big thanks to our marketing team who quite often have to pull out the stops and work their magic every week in order get these updates ready and out to you.
So, with that; enjoy the holidays with your family and loved ones!
Take a break and relax and when we come back, we’ve got a really good 2022 to look forward to.
From me and all the team here at the Right Mortgage & Protection Network; Merry Christmas and a happy new year to each and every one of you!
