Protection Update 1st April 2022
When reality bites; It’s time to make a claim!
Hi everyone and welcome to this week’s protection update. These things are always a bit more difficult to put together when you’re on the road and this week I’ve been in Newport, South Wales; Brentwood in the South East and then up to Durham in the North East for the last of our round 2 roadshows.
It’s been a lot of miles travelled, but it was really great to see everyone and actually start putting names to faces after only being able to speak to you on the telephone up until now.
So, I’ve given the title of this week’s protection update – “It’s time to make a claim – when reality bites”.
On my drive across from South Wales to Brentwood, I had a long chat with Phil Appleby from Cary Independent Mortgage Services down in Somerset and after about 10 minutes of that conversation, I wanted to make what we were talking about, the subject of this week’s protection update.
I’m going to talk about a real claim situation and obviously, I’m not going to talk about any of the actual personal details of the client involved or betray any confidences, but there were some really interesting observations to take from this story. This is real and this is what actually happens to normal people all the time…
We need to go back 10 years ago which is when Phil did a buy to let mortgage for this particular client.
Straight away, that caught my attention because how many times do we arrange personal protection in the situation where the client is arranging a buy to let mortgage? We do, but not as often as do when we arrange residential mortgages.
Often people think they’ve got assets and equity that they can use, but are we having those conversations about protection and the reality of the risks they face? There is still often a need for protection.
In this situation, Phil met with the client for the protection meeting and agreed with the client to focus on the impact of critical illness. That was the priority for the client and on that basis, Phil gave his advice recommendation for a life or earlier critical illness policy, which the client accepted.
The premium was significant; over £100 per month.
There was another interesting comment that Phil mentioned to the client 10 years ago in his correspondence with the client made which I wanted to mention.
He wrote to the client when the terms were offered by the life office and the premium stayed the same (it wasn’t rated and there weren’t any exclusions imposed); Phil wrote “the life company have now completed their assessment of your application and you have been accepted on the basis of the terms we discussed (the original quote) and this is excellent news”!
I think there is a good point in there.
When you produce a quote, it’s a quote. That’s not the price. It’s not guaranteed. Not until the terms are offered and I think it’s quite important that clients know that.
When you do your research do your clients understand it’s a privilege to be accepted for cover? Many people can’t get it because of their health and medical history and it doesn’t matter how much they might want it; it’s not happening.
If we fast forward to this year, the client has had the policy for 10 years. They have paid their premiums and the policy is still in force.
Phil was contacted earlier this year by his client who informed him she was undergoing chemotherapy for Cancer.
If you can imagine that reality; claiming on the policy wasn’t actually the biggest priority. She had cancer and she needed to battle it.
In one of the first correspondence, the client wasn’t quite sure exactly what she had bought. She knew it was something to do with sickness but its clear she didn’t know whether this policy was something she could use and claim on in this particular situation.
I’ve called this protection update “When reality bites” because in another correspondence, the client is talking about the fact she is now self-employed and therefore gets no sick pay benefits.
She talks about the fact she would like to keep working as much as she can because she needs to, but she wasn’t sure whether working would affect any ability to make a claim.
I often talk about clients throwing the policy documents in a draw and then forgetting about them. They know they are there, but do they read them? Not often.
Well, this client wasn’t sure where she put the policy document and she thought this might affect the claim. She thought it might be in the loft?
But she said that that after a couple of very recent operations; if that’s where the policy is, she physically can’t get up there to take a look. She’s just not strong enough.
And in another heartbreaking line, she talks about the fact the prognosis of her illness isn’t clear and she’s not sure she is going to make it and therefore wants to get her house in order and start thinking about nominating some beneficiaries.
This is real stuff and all you can do as the adviser in that situation is help as much as you can. Help to get the claim paid and just take that burden away from the client.
Well, if we fast forward to now and I can confirm the claim has been paid. It’s a significant amount of money and the client now has choices and a new outlook. Her battle isn’t over yet – she’s still got cancer, but all we can ever do is put money on the table when they need it the most. That’s it.
The client wrote really positive things about the claims process and that it was all handled professionally and sensitively.
And that’s a good result.
Phil and myself talked about using some of the positive energy from this story to think about any other clients you’ve spoken to in the past who didn’t take up the opportunity to make sure they had cover in place.
We know there are lots and lots of them.
I had another thought the other day when I spoke to Phil which is that we talk often about ‘Client Bases’. What is a client base?
It’s a collection of all the people you’ve done work for in the past. Your clients. And they would all have done different things. Arranged mortgages, remortgages, took insurance, not took insurance.
But do they see themselves as one of your clients in your client base?
Maybe. Maybe not?
Why not get in touch with people you’ve spoken to in the past?
Explain that you consider them to be one of your clients and you’re writing to them because you’ve got a duty of care to keep in touch from time to time and point out risks that you see as a professional adviser.
There’s something quite noble about that.
Create a reason to call your clients and start conversations.
Create urgency in those reasons to call.
Talk about stories like this because you actually have a unique vantage point to see people make claims and that is so inspirational when that happens because it validates what you do.
Perhaps look at working on pockets of your clients. Send them a note and then follow up with a phone call.
Be assertive. Be confident and be passionate about what you do. Talk about duty of care and perhaps you passed on the opportunity to do something last time but it’s not too late.
In your business you advise, you sell, you get paid.
But people sometimes claim and when they do, it affects their lives and all of those around them.
I’m going to leave you with this thought and this is a theory of mine…
Everyone who is sane and reasonable wants what protection gives them.
Do they want a life assurance or a critical illness policy? No probably not.
But do they want to be able to live. To function without further stress, pay the bills? Yes.
Protection is that very weird commodity which “I recommend you buy it. I want you to pay for it on a regular basis, but I don’t want you to use it”
What else do you buy where you don’t want to ever actually use? I can only think of insurance.
Clients want what it gives them which are choices and a bit less stress when they need it the most.
Thankyou Phil for sharing that real life story with me and thankyou for allowing me to talk about it in this weeks protection update.
Let’s talk about Protection – Friday 13th May
Just to say before I wrap this up; we’ve got a brand-new protection sales ideas workshop happening in a few weeks’ time on Friday 13th May and it’s called “Let’s talk about Protection”. It runs from 10am to 12noon and I’ve added the registration link to this week’s protection update.
The reason I’m mentioning this workshop which takes place in about 6 weeks’ time is because we did issue an email today with the incorrect date.
Apologies for that and I can see that quite a few of you have already registered and I’ve written to everyone directly, and we’ve corrected the date on that initial invitation email.
The idea behind this workshop is that we’re going to look at several scenarios in the advice process for protection and talk about them. Talk about best practices and sales ideas for creating the best possible conditions for the client to understand what we’re talking about and help them to buy into the need for protection.
I’d like that workshop to not just being me doing all the talking and it would be great to share ideas and hear from other advisers. I think it should be should be fun and productive.
If you want to join us; I’ve added the registration link to this week’s protection update, and as I said, I will remind you about this workshop a little bit nearer the time.
National Training Event – 28th April – Reimagine, Refocus, Reignite
Final thing from me this week… the NTE
Have you booked your space at the NTE? Its live and its in Birmingham in 4 weeks’ time.
It’s going to be amazing to all get back together again and we’ve got a great agenda for the day. We’ve got some protection specific announcements to make and we’ve got a massive exhibition hall which you’ll be able to engage with for the first time since 2019.
We’ve actually had to some lenders and providers away because we physically can’t fit anymore into the room.
And as far as registering for the event is concerned; we don’t have unlimited spaces and there aren’t that many left so please register now if you haven’t already. I’ve added the registration link to this week’s protection update.
