To ensure clients get the best protection they need, you need to start by asking the right questions, says John Somerville.
It’s easy to make assumptions when advising on protection. But how do you avoid that trap and get down to real customer needs, not just what’s apparent on the surface.
This is an easy technique for anyone wanting to get the very best outcomes for their customers. I call it the ‘Four Whys’.
Why this product?
Why should the customer need life cover instead of critical illness? Why shouldn’t they have income protection? Have you considered family income benefit insurance?
The aim of this question is to discover what is more important to them. And don’t forget all of the additional features that protection products carry, such as a waiver of premium.
Why this provider?
It may seem a bit odd for you to ask this question of a customer. After all, you’re the expert, and they’re looking to you to help with this recommendation.
However, it’s important that once you have explained all the alternatives with them and they have understood the different providers that are available, then they are likely to have a preference.
They may have had bad service from one in the past. They may like one reputationally over another.
Unfortunately, the price may define which provider a customer chooses. It’s your job to ensure a customer takes the right provider that is appropriate to them.
Why this amount?
It’s very easy to only cover a capital debt or an amount for a specific purpose. Other needs are often overlooked.
In the case of mortgage protection, a critical illness policy may be recommended to cover the outstanding balance.
However, when a critical illness is diagnosed, most customers use the money to pay for recuperation, such as a holiday for them and their family and to let them enjoy valuable time with loved ones.
Paying off the mortgage is important, but often not at the top of their list. So a recommendation that takes this into account would be extremely valuable.
Why this term?
For family protection, this is an area that often falls short. If you are protecting children until they are independent, and only cover them until they are 18, then you are likely to be leaving them short.
Be realistic and have an honest conversation about how long your clients expect their children to be dependents. Don’t forget to take further education into account and then trying to get on the property ladder.
Another thing to double check is the term of a mortgage. So many mortgages are underinsured because an adviser has ended a policy early.
And always check on the new term after a client has remortgaged.
Why I haven’t mentioned price
I don’t encourage a discussion on price. Recommending the cheapest cover is likely to cause you issues. Some customers will go and see if they can purchase the same cover online and beat your price.
Using this approach will help a client understands why these four areas are so important. They’ll understand it’s not just about price and will have invested time and effort thinking about the right solutions for themselves and their families.
That will not only serve them better but help them to see you as the professional you are – giving them the best advice possible.
First published on the LIBF website
