Dan Maskell, MD of Finance Planning Group, offers advice on how to broach the often tricky subject of insurance and protection with clients.
When I talk to clients about life assurance their eyes tend to glaze over. Why? Because it's ‘not the most interesting conversation' that they want to have. However when you talk to couples about protecting their family, home and income you get an entirely different response.
Any protection product can be a hard sell because the client gets nothing tangible for their money (just a policy document that gets filed away) plus they are paying out every month for something that they hope will never happen.
The other challenge is that people don't tend to want to think about it until they are older, by which time of course, cover is much more expensive. If only people weren't so immediate in their priorities.
A lot of people may believe it won't happen to them but recently we have seen people in the public eye pass away at relatively young ages and this has brought things into focus. There have been businessmen, celebrities and sportsman such as Steve Jobs (56), Whitney Houston (48), Michael Duncan (53), Graham Dilley (53), Eddie Stobart (56), Seve Ballesteros (54) who are no longer with us, and then look what happened to Superman!
Many of these were well-off individuals who could afford the best healthcare money could buy. With a protection gap of £2.4 trillion this must be a big opportunity for advisers and with the mortgage market where it is, it's a great opportunity to review your clients to discuss their protection needs.
With all the challenges in the market it's amazing when you look at the pounds per hour it takes to research and administer the average mortgage.
We believe the average time is between 10 and 12 hours, which equates to about £35 per hour for mortgages that complete. It will be a lot less when the mortgage falls through for whatever reason.
It therefore makes sense to look at the protection at the same time because this can increase your earnings per hour to over £100. By reviewing your clients and discussing additional family protection where no mortgage is involved your pounds per hour should increase even more.
Of course, talking about earnings per hour can seem quite cold, but selling protection is a very positive thing and represents nothing but good. It's a great feeling when you come away knowing that a family has everything in place should the worst happen.
So we know it's our job, people need it and commercially its worth doing, so let's not forget to ask the question and sit back and listen.
I was speaking to a friend the other week and he asked me about a presentation I was arranging. I explained that it was about life insurance. His response shocked me when he replied that it's not a great subject to talk about.
Overall, I think that's the hurdle we need to jump over. This subject shouldn't be hidden away and no-one should be embarrassed or afraid to talk about it.
We need to be brave and ask mums, wives, partners, dads, husbands what standard of living they would they want for their family if they were off long term sick, suffered a critical illness or die.
They would respond by saying ‘the same as we have now' and therein you have an area to address. Ask the question, listen and you will be amazed with the response.
Dan Maskell is managing director of Finance Planning Group
