Communicating a policy's peripheral benefits can add the edge that intermediaries need to make the sale, says Dominic Howard
The importance of communicating benefits associated with protection products has never been greater for intermediaries. Faced with consumers’ lower spending patterns and the increasing threat of price-focused protection websites, intermediaries can differentiate themselves from the competition by demonstrating how policy benefits that the public may not be aware of, can be of real value.
The core benefit of all protection products remains, of course, the payment of the policy proceeds if the insured event were to occur. In the individual term market, the key challenge, which has not changed for years, is that many consumers do not see the need for cover. This view may even be strengthening, as people decide that the risk of premature death is decreasing, given the publicity around increased longevity and the need to extend working years to fund for a longer retirement.
it won’t happen to me
For income protection and critical illness, concerns around affordability and the ‘it won’t happen to me’ mindset, continue to be barriers to new sales. While intermediaries are well versed in overcoming these objections, being able to offer additional valuable benefits can make a real difference in securing the sale.
In the employee benefit arena, while employers value having their employees returning from sickness earlier through the utilisation of corporate medical insurance or group income protection schemes, employees remain lukewarm about these products.
In research conducted by TNS and Employee Benefits, when employees were asked to rank their preferred benefits, the highest ranked insurance benefit was private medical insurance in eighth place, with life insurance and income protection equal 15th. Whereas the core protection benefits are of primary importance, having added-value ancillary products as part of the insurance package will increasingly become a key factor in both provider and product selection, particularly in the growing flex market.
The range of added-value services for intermediaries to discuss with their clients has never been greater. Telephone counselling services and specialist nursing for conditions like cancer are included in some providers’ products. Advice on lifestyle and healthy living has also emerged in response to consumer awareness of the importance of these factors. My own organisation provides expert second medical opinions to policyholders and has seen huge growth in recent years.
Intermediaries active in the employee benefit sector can also draw on the above and, in addition, have Employee Assistance Programmes (EAPs), rehabilitation services and a plethora of helplines providing advice on topics from legal issues to how to manage absence management amongst employees.
Given the amount and variety of all these ancillary services, are they actually of real value? One of the reasons often given by consumers for not buying protection, is that they think the chances they will make a claim under the policy to be very low: so paying premiums for a protection product is not the best use of their hard earned money.
False sense of security
While this false sense of security can be successfully challenged by intermediaries, being able to tell clients that they can still receive tangible benefits from the policy even if they do not make a claim under the core policy, is a strong selling point.
Of the members who used Best Doctors last year, 97% would recommend the service to family and friends. A powerful sales tool in itself, this is reinforced when coupled with the findings from research that show that the most popular source of information on protection products for adults aged under 45 is family and friends. Satisfied clients are real advocates and a great source of leads.
Health related benefits also fill a tangible consumer need that is actually being fuelled by technology. Over 90% of us have sought some form of health information online in the last 12 months. When confronted with a medical problem or issue, the first thing that over a third of us will do is to go online. Doctors are reporting seeing many patients who have developed “cyberchondria”. This can take the form of checking up their symptoms on the web, and coming into the surgery anxious and concerned, through to the more extreme, self-diagnosis of a major health problem. By providing health related information services that are contemporary, relevant and tangible, intermediaries will be viewed as adding value themselves.
Given that there has been a substantial increase in the number of added-value services, how do intermediaries choose those most appropriate for their clients? Key features to consider are –
- Is the service easy to access and simple to explain? Consumers can find insurance challenging, it is important that any extra benefits do not complicate the process further.
- Are the benefits restricted to the policyholder or do they extend to other family members? Having coverage extended to children is a particularly strong feature in the minds of many consumers.
- What sales aids are provided? Powerful and engaging case studies and customer testimonials are hugely important and can prove the decisive factor in the decision whether to proceed or not.
- Will the benefit differentiate the intermediary’s service sufficiently? Providing a service that is not easily accessible by consumers is another reason to choose to purchase a protection product through an intermediary.
- Will it make the product easier to sell?
- Will the added-value benefit improve policy retention?
- Does it have the ‘wow’ factor that makes the product to which it is attached stand out from the crowd?
When the intermediary is faced with demonstrating to an employer that providing employee benefits in the form of group risk covers to their workforce is appropriate, additional benefits can play a valuable part in their proposal.
Headcounts at risk
The current recession has resulted in both employers and their workforces being under pressure. Employers are looking to trim payroll costs in order to stay competitive while their employees often have concerns regarding job security and are struggling with increased workloads as headcounts are reduced.
In this environment, low cost but high value benefits become increasingly important. The employer can demonstrate to the workforce that they are valued and are being provided with real benefits, even in these difficult times, that can improve the quality of their, and their family’s, lives. If more costly benefits are not possible due to budgetary constraints, introducing a product that provides a tangible service at lower cost, is still a positive move.
As headcounts are under pressure, employers will have employees that are key and important to the business. Value-added benefits will help retain key staff, particularly as the hold that final-salary pension schemes used to have, is lost as schemes are closed. Importantly, again particularly in these challenging times, many additional services will have a positive impact on the health of the workforce, either by reducing time lost through stress or by getting them back to work faster.
The intermediary can demonstrate to employers that the service he or she provides is of real value by:
- Careful selection of the added-value benefit they are offering to the employer.
- Proving how this will help the employer retain key staff.
- Showing how sickness levels will reduce and/or employees will return to work faster following illness.
- Helping communicate the value of the benefit to employees.
Having demonstrated that added-value services are good for consumers, employers and their workforces, are they really worth an intermediary spending time researching and then placing in their sales kits? The answer is an undoubted yes.
Some of the services being offered by providers are difficult, if not impossible, for consumers to access themselves. The intermediary can really show clients that they are adding value.
Non-advised channels will not provide this sort of service.
Often, the difference in premiums between providers can be very small. By taking their clients through what other benefits are on offer, intermediaries will again be able to demonstrate why clients should use their services.
Dominic Howard is director UK and Ireland at Best Doctors
