4th March 2024

A focus on comprehensive Protection planning

Advisers can no longer afford to overlook life, critical illness, and income protection insurance. Those embracing their advisory responsibility are focused on ensuring comprehensive protection for all clients, with regular reviews to maintain relevance. On the other hand, those feeling overwhelmed, preoccupied with mortgages, or lacking interest must now guide clients to firms with established arrangements. Numerous protection specialist firms are eager to collaborate with busy mortgage brokers, efficiently addressing the responsibility requirement. 

In typical regulatory fashion, obligations often open doors to various opportunities. Ahead of client reviews, astute advisers can assess potential over-insurance in mortgage protection. Older decreasing term plans, issued based on assumed interest rates like 8% or even 15%, can be evaluated using online amortisation tables. This enables advisers to determine the current insurance sum versus the mortgage balance, facilitating a meaningful client dialogue.

Conditional on standard health caveats, clients may have options to reduce monthly expenses or retain premiums while enhancing coverage scope—a mutually beneficial outcome for both clients and advisers likely to attract additional business due to superior service.

Regular reviews also unveil significant life changes, such as childbirth, necessitating adjustments to advice, particularly with a focus on family income benefit. Clients operating as limited companies may discover tax-efficient options like Relevant Life insurance. The cost-effectiveness of family income benefit often improves over the years, presenting clients with money-saving opportunities in the current economic climate.

For protection-oriented advisers, revisiting clients who faced rejections or exclusions due to factors like BMI, Type 2 diabetes, or HIV is a worthwhile endeavour. Evolving underwriting practices may now offer improved terms or acceptance for these cases.

Illustratively, two decades ago, a client faced a cancer exclusion and premium increase due to a previous testicular cancer diagnosis. Through discussions with various underwriters, an insurer was identified offering standard terms without a cancer exclusion. Subsequently, when the client was diagnosed with cancer in the other testicle, he received a pay-out sufficient to fully repay his mortgage. 

Clients struggling to find acceptable terms or acceptance can turn to specialist firms nationwide. Companies like Cura and Moneysworth are equipped to accept referrals and establish agreements with referees, facilitating superior underwriting outcomes.

Alan Lakey, CI Expert
https://ciexpert.uk/

Protection