Protection is a social good that is undersold in today’s market. Why do so many people insure their pets and phone, but not themselves? The answer is because it’s seen as a difficult conversation to have. Who wants to talk about dying or becoming seriously ill? No-one. But I believe it’s the job of the industry to educate people about the risks they face.
To do this we need to change the focus of the conversation. I think it’s fair to say that for mortgage advisers selling protection, many of them see it as a necessary evil – something their client doesn’t want to have but should. Which naturally means the focus is on price. How can I help my client pay the least for this cover?
But that’s not the right positioning. We need to move the protection conversation away from price towards a client’s capacity for loss, as defined by the FCA, combined with their attitude to risk. Think of it as education. As an industry we need to do much more to inform clients about the possible downsides they face. What can a person and their family afford to lose if their health deteriorated or they lost their life?
They also need help to understand the incidence of key conditions. Cancer Research UK says that today, one in two people will be diagnosed with cancer in their lifetime1. That’s a huge statistic. For advisers, this focus on risk and incidence – which better educates people about the cover’s value – generates much more meaningful dialogue based on an individual’s circumstances and what they need to protect.
What’s more, when the focus is on risk, then it’s clear to see why quality has such an important role to play. In other words, how likely is this policy to cover the high incidence conditions and to pay out? Many customers don’t fully appreciate the likelihood that they will get a critical illness.
Trust is a factor. The industry does need to do some more work to rebuild its reputation. But again, this points directly towards the need for higher quality, rather than lower price. The trend needs to be towards providing products with fewer exclusions, rather than more. We need to provide certainty to the customer and their adviser, that if a client is diagnosed with a condition by their UK Consultant that they expect to be covered for, their policy will pay out. I think that once customers understand the value of a higher quality product, they’re usually very willing to pay a higher price for it.
At Guardian we’re trying hard to help advisers have that ‘capacity for loss’ conversation knowing that our product will not let them down. We’ve built it to overcome the common blockers to selling protection. We give advisers confidence of better customer outcomes – providing simple definitions with no general exclusions that give more certainty of payout.
We have also developed our marketing literature to help create meaningful conversations that support advisers and help deepen their client relationships. The best conversation hook is to talk through scenarios, to help customers understand why they need protection and what type of protection is best for them. To assist with this, we’ve recently launched our wheel of life marketing campaign.
Finally, once an adviser has helped their client appreciate the need for protection, we’ve worked hard to make the sales and underwriting processes as easy and intuitive as possible. Being a digital business, we’ve been able to build our processes from scratch using digital technology. Our Qi underwriting tool can quickly give an indication of underwriting, to save time before making a full application. Once you’ve moved on to application, the smart form asks medical questions in the right order.
We believe that the opportunity for protection is huge, and as yet, largely untapped. Society is changing – people no longer have a job for life. Longer length of life also means they are more likely to suffer a critical illness. They need life and critical illness protection now more than ever. Capacity for loss is the most important factor – helping customers understand what risk to their livelihood they can afford to take on. Mortgage advisers are uniquely positioned to help with this.