Advisers are vital in shortening life insurance delays. In his latest blog for IFA Magazine, Ahmed Bawa (pictured), CEO of Rosemount Financial Solutions (IFA), shares practical insight on why guiding clients and overcoming discomfort at the point of recommendation are key if we are to make protection a priority for clients.
‘I’ll do that later’. It’s something all of us say at some point about a task that doesn’t feel particularly urgent. But that delaying decision can be seriously costly, depending on what it is that’s being put off.
And a new study from the Post Office highlights the fact that an awful lot of people are taking that approach to life insurance. It suggested that, on average,Brits take more than 10 months to actually purchase a life insurance policy, after adding it to their ‘to do list’.
Of course, given that this is just the average, plenty of people have an even longer period of time between recognising they need cover and actually taking a policy out. In fact, the research reckons that more than one in three had taken as long as two years to finally get to the point of purchasing the cover.
There are all sorts of different reasons why people end up taking such a long time to secure their policy. The study found that some feel weighed down by the sheer amount of ‘life admin’ tasks they have to take on, while around a third were unconvinced they needed the policy, or that it was a priority for them.
The role of advisers
These reasons for putting off taking out protection will likely be familiar to plenty of advisers. There will always be clients who don’t believe they really need insurance, or who are happy to kick the can down the road until a later date.
This is where the adviser’s role becomes crucial, acting as an educator to ensure clients fully understand that certain protection policies are not just ‘nice to have’ but essential.
Advisers are also in the prime position to help trim that timeframe between recognising the need for protection and actually taking it out. This isn’t about engaging in some sort of scaremongering tactics, but rather clearly and consistently making the case for protection.
The worst case scenario is for a client to decide they need protection, but to take too long in signing up for cover, leaving them and their family exposed. If financial advisers keep protection front of mind, then they can reduce the chances of that happening.
Overcoming adviser discomfort
One factor that can contribute to the prolonged process of taking out protection products is adviser awkwardness. Helping a client to get to the point of signing on the dotted line for life insurance, income protection and the like is not as easy or as straightforward as other products, like a mortgage for example.
Clients come to an adviser knowing that they want a mortgage – it’s rare that they approach an adviser actively wanting to secure protection. Instead, the adviser has to make the case for the protection, take on more of a sales role. That requires a different skillset, a different attitude, and it’s not one that advisers are always entirely comfortable with.
Overcoming that awkwardness is crucial though, particularly in the Consumer Duty era where the regulator expects advisers to properly cover the protection options.
It’s an area we’ve worked on extensively at Rosemount, establishing surgeries and workshops for advisers to help them get a better grasp of not only the products themselves but also how to be more effective at promoting them.
We have also established a Google group which all advisers have access to, providing them with an informal route for getting advice from more experienced peers about particularly tricky cases or specific issues which they are having trouble overcoming. On top of that, some advisers have benefited from mentoring from our more experienced protection advisers, giving them a first-hand look into how to have these conversations with clients constructively, and present protection in the best possible light.
Getting to the finish line
There is no golden bullet to overcoming adviser discomfort around ‘selling’ protection. But the fact that it doesn’t come naturally to all advisers isn’t a reason to do less, it’s a reason to do more.
Those of us who work in supporting advisers have a responsibility to not only act as advocates for protection, but to ensure that there is adequate training, guidance and help for those who recognise the importance of these products but may be struggling to make the case to their clients.
If we do that, then we will see far more clients enjoy a shorter journey to signing up for the protection cover which they and their family so clearly need.
