Talk about risks - better protection conversations

21 January 2019
Part two of our 'Five top tips for better protection conversations' series - talking about risks.

banana bunches thumbnailIn my last blog, I talked about the idea of signposting protection early. If you don’t mention that you expect to be having a protection conversation early enough, there’s a good chance it won’t happen.

If your client is coming to you for a mortgage, it’s your duty of care to at least put the client in an informed position where they understand how life would look should the worst happen.

So give your clients the opportunity to tell you they don’t want protection.

I believe that mortgage and protection advisers have a potentially tough challenge on their hands so having a strong process is vital. On one side, you can help your clients achieve something incredibly exciting – their new home - and you can play an instrumental part in this.

But on the other hand, how do you begin to talk about something which seems grim – death or cancer?

So, lay down the marker that explains the way you work with your clients.  It’s normal business practice and what you can expect from a professional financial adviser.

Now in this blog, I’m going to talk about something which has only really been available for advisers in the UK for the last few years but this could make all the difference. The opportunity to talk about risks.

Creating the right conditions

If you think about life, we consciously and subconsciously think about risks, chance and probability every day. 

Some risks which we perceive as high risks might be things we choose to avoid such as going for a parachute jump.  Whereas other risks we might deem very low and therefore don’t even worry about them.

If you look at the 2018 Grand National horse race, it’s estimated that 12.9 million people placed a bet.1

How many of these people would have been influenced by the odds? 

Did the fact that a particular horse that the bookies said had a better chance of winning have any influence on how many bets were placed on it?  The answer is certainly YES for many of those bets.

With protection, the industry publishes information about claims every year. 

There are also various sources that give us accurate predictive information in terms of how many people are estimated to die each year, suffer from various cancers and how many people are estimated to take time off work sick.

And this means if we have all this information to hand, we’re able to predict the typical chances that people with protection policies will actually make a claim during the policy term.

Various sources that give us accurate predictive information in terms of how many people are estimated to die each year, suffer from various cancers and how many people are estimated to take time off work sick.

Better protection conversations

Part three of our Better Protection Conversations blog series focuses on questioning techniques you could use to help you understand your clients better.

Using our marketing studio or answering just one additional question on our online quote service, you can create a personalised risk report to show your clients the chance of them dying, getting a critical illness or being unable to work due to illness or injury before their retirement.

Top tip number two is to simply use our risk report with every client during every protection conversation. 

This in itself could be the thing which makes the client understand the need for protection and it helps you deal with objections such as ‘I don’t need it’ or ‘it won’t happen to me’.

With firms using tools like this reporting a 50 per cent growth in mortgage (protection) penetration it could be a gamechanger in overcoming client objections.2

Sources

1 https://www.chroniclelive.co.uk/sport/other-sport/grand-national-2018-facts-horserace-14523968
2 https://www.ftadviser.com/protection-products/2018/12/12/gamechangers-of-the-protection-industry/?page=4

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About the author

Vincent O'Connor

Senior Protection Development and Technical Manager

Vincent has worked in Financial Services since 1994 and has experience across a range of different perspectives. He has started out at a life company and then ran his own Mortgage and Protection brokerage. Most recently he worked for a large network where he set up their ‘Protection Academy’ for adviser learning, development and skills training, but is now back at a life company (Royal London); again with a specialist focus on protection. Vincent is involved in developing adviser facing content, presenting, writing articles and commenting for the press. Vincent is passionate about the need for protection, but also about the importance of proper financial advice. Vincent enjoys his holidays, good food and quality time. He also enjoys art and crafts in his spare time!

This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit royallondon.com.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.