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Insurance review

My protection training with advisers and paraplanners has revealed many business ideas and I share the best ones with MS readers

Kevin Carr MS blog

Over the last 18 months I’ve been around the UK training financial advisers and para-planners about the UK protection market.

We teamed up with the Personal Finance Society to provide independent sessions aimed at improving knowledge and understanding of the protection industry at all levels.

One of the most interesting parts of these sessions has been hearing about what other financial advisers do and passing that knowledge on for discussion in future sessions.

Some ideas might appeal, some you will have heard before, and others will be quickly dismissed. But what follows are some of the best ideas we’ve heard from advisers.

1. Employee handbook

Ask for a copy of any new client’s employee handbook. Assuming the client is employed most firms put this information online. Then provide a simple one-page summary of the benefits – pension, life cover, sick pay etc. What this also does is highlight any gaps the client may have in terms of their financial protection, so as well as telling them what it does it also spells out what is missing. What is more, this becomes an excellent referral tool because the client may well tell their colleagues about this nice one page summary, which others might want to see for themselves. And occasionally, it might just lead to conversation with the employer too.

2. Advertising

A number of insurers have spent large sums advertising the need for protection on television recently. Aviva’s campaign with Paul Whitehouse springs to mind as does the Unum ‘Back-up plan’ adverts. Advertising life insurance and other products on TV won’t make everyone go out and buy some, it’s not that kind of product. But it does give advisers a really good way of introducing it into the conversation. ‘Did you see that advert with Paul Whitehouse?’ is perhaps better than shall we talk about your life cover now.

3. The media

It is a myth that the press only report negative stories. For sure, there are declined claim stories in the press and on TV, which stay long in the memory. However, the majority of coverage about the protection industry is both balanced and often positive. Most newspapers cover the protection industry perhaps once a month and these stories often feature paid claims, paid claim statistics and generally good advice about what readers should and shouldn’t do.

4. The cash machine

An oldie, but a still a goodie for some advisers. The idea is simple: if you could buy a machine to legally print money would you buy one? Of course you would. You would stick in the garage and hope nobody else ever saw it. Might you insure it against breaking down? Most definitely. The machine is of course you. You legally make money every month and yet you don’t insure yourself against ill health if you can’t work. People insure many things but often not the one thing that pays for everything else – the salary.

5. My favourite

My personal favourite when I was advising clients was to ask this simple question: Would you like the cheapest cover or the best value for money? I like this because it is one of those questions which almost always gets the answer you are looking for, which is something along the lines of tell me the difference. This means the client is asking for some examples of why the cheapest option might not be the best for their circumstances, which should be music to all advisers’ ears.

Hot insurance stuff

*The Financial Conduct Authority could force all insurers to publish claims data. In a discussion paper it says publishing claims paid data would help advisers compare products and would help consumers to focus on a product’s value rather than its price. Most people would probably be in favour of compulsory claim statistics.The two issues would be to make sure companies are reporting on a like for like basis where possible, and to agree at which point does it become compulsory – a new insurer has no claims to publish so there would need to be an agreed entry point.

*Scottish Provident paid out 93 per cent of all critical illness claims in 2012. The provider’s critical illness claims report said this represents a pay out of over £94m. Just 2 per cent of claims declined for non-disclosure. The average pay out was £88,975, with the largest claim for £1m.

* Those working in information technology have the highest volumes of searches for accident, sickness and unemployment cover according to new research by  Moneysupermarket.com. Taking second place were those in the banking sector and third in the list were those working in the retail sector.

* Women are more savvy at pulling a sickie from work than their male colleagues, according to a survey – a poll of 10,000 adults found that one in 10 people have been found out when taking a day off work despite not being ill, either by bumping into a fellow worker or posting tell tale clues on social media websites.

Tip of the month – Improve your protection knowledge

Protection Review and the PFS have just announced three new independent protection training dates for advisers. The half-day sessions are free to PFS members or £50 otherwise and cover all aspects of the market including products, underwriting and sales.

  • April 11 – London

  • May 22 – London

  • May 30 – Southampton

Email kevin@kevincarrconsulting.co.uk to register.

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