It’s inevitable that during the current cost of living crisis, people will be keeping a watchful eye on their budgets – trying to make savings where they can, so they can still afford the things that are important to them.
Clients considering protection may be put off- at least in the short term – by the thought of paying for something they may not use for many years, if ever. And clients with protection in place may be taking a closer look at their monthly Direct Debits to see if there are any outgoings they can cut back on.
We all appreciate it could be disastrous for a client if they decline or cancel a policy only to have something dreadful happened to them or their family. So, how can we help clients appreciate the value of protection, especially in tough financial times like these?
I think the first thing, for existing clients, is to remind them of exactly how the policy will help if they need to make a claim. Often a plan will have been taken out to protect their home, their family, and their lifestyle, and I doubt that this need will have changed at all. In fact, in times of adversity clients often feel more vulnerable, so reminding them of exactly how this policy can protect them financially, will often be sufficient to recognise the importance and therefore maintain their existing cover.
And when you talk to clients about taking out cover to protect their lifestyle – what does this mean now? Some clients may still want to ensure that if anything happens to them, their family will have enough of a financial cushion to be able to do things like maintain hobbies, go on foreign holidays and have regular days and meals out. Others, who find monthly budgets getting tighter, may want to ensure their family’s most important needs can be covered, like paying their rent or mortgage and regular bills.
Of course, our menu plans offer your clients the ability to reduce cover or cut back on certain elements. And while this should ideally be avoided, retaining some cover is certainly a better option than cancelling a plan in full if budgets or priorities have changed.
Many clients will not appreciate the cost associated with cancelling their cover, so discuss with your clients how their premium will increase with age and health issues – so taking out a cover in years to come may turn out to be very expensive or it may not even be possible if clients have suffered any serious health issues.
So, how do we engage clients with protection plans if budgets are tighter?
I’m sure most advisers will talk about the risk of premature death and sickness (either a critical illness, or a long-term illness or injury that requires time off work), but often it can be difficult to show clients the probability of these outcomes. So, for new and existing clients, perhaps run a personalised risk report to highlight their own chances of getting a critical illness or being off work for three months or more. And it’s likely that these risks are now even higher for existing clients than when they first took out their plan.
And on the flip-side – remember clients whose premiums were rated, such as smokers, those with a high BMI, or having a hazardous pursuit or dangerous job, will have the possibility to review the terms of their plan if they have improved or negated their health issues or changed their job or lifestyle, so there might be an opportunity to review their plans and decrease their monthly payment.
These days a lot of products and services available in the financial sector offer some form of tangible aspect, from being able to log-into your current account online to viewing the value of your pension on a mobile app.
Helping clients to see their protection policy might help them engage with what they are paying for. Our new customer portal, My Royal London, means clients have access to their policy details online at any time, and they can make changes such as updating their address details.
Plus, many providers, including Royal London, offer access to some form of additional support services that can provide tangible benefits even if there’s no claim. For example, we offer new and existing clients access to services such as mental wellbeing apps, 24/7 virtual GPs, dedicated nurses who can refer clients to therapies or for a second medical opinion, and helplines for legal and career services.
Letting clients know their plan includes services that can add real value to their day-to-day lives, at no additional cost, might make a difference in their decision to go ahead with protection.
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