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With your website a great way to help clients better understand their protection needs, Kevin Carr, chief executive of Protection Review, runs through 10 things you can put on it to help increase protection sales
There is an unfortunate saying in financial services that protection is sometimes sold rather than bought, so good advisers will make every effort to engage people in the area’s importance. In today’s world, alongside the advice process, your website is one way of giving clients access to additional information and helping them better understand their protection needs.
While tools and calculators can be particularly effective here, it is often costly and time-consuming for advisers to build their own bespoke offerings. Most insurers can give advisers content to embed in their sites or you can link to external sites or access industry-wide available material to boost your protection content. Here are 10 things you can put on your website to help increase protection sales.
* BMI calculators
One of the biggest reasons people do not take up a protection policy is because the premium quoted increases during the application – often due to a health or lifestyle issue – and w eight is one of the most common factors here. Body mass index (BMI) is the measurement used by most insurers to ascertain whether someone has a healthy height-to-weight ratio. As a guide, an ideal BMI is in the 18-25 range.
Typically, insurers start increasing rates at a BMI of around 30, while a BMI of 40 or over is likely to be excluded. Ratings can also be applied if clients are significantly underweight. Advisers can request detailed indicative ratings from insurer’s pre-underwriting or pre-sales teams.
Weight can obviously be a sensitive question when discussing protection applications but, by providing clients with a simple BMI calculator, you can help set expectations of likely policy ratings. The NHS offers a simple BMI tool that could be linked to online, and many insurers offer online BMI calculators that can be placed on your website.
* Show the need for protection
Another barrier to taking out protection is that people tend not to believe ‘it will happen to them’. It is hard to imagine you will become ill long-term, die prematurely or have a serious accident. When people do take out protection, most take life cover, then critical illness, then income protection – yet this is generally the exact reverse order of how likely they are to need each product.
Life cover is widely known about and understood but – despite them being more relevant for most people’s needs – products such as income protection are not. Insurer LV recently launched an online tool for advisers to use with clients, to determine the likelihood of needing various forms of protection. After answering five questions it showed that, before the age of 65, a couple in their mid-to-late 30s would have a 62% chance of being too ill to work for two months or longer, a 26% chance of suffering a serious illness, a 13% chance of dying and a 75% chance of one of these scenarios happening.
Adding or linking tools of this kind to your website can give people a reality check, and help make the case when advisers are determining which products are likely to be needed. You can find the LV tool here while insurer Vitality also has a similar, if more in-depth, calculator on its website that helps to determine your ‘real’ age based upon a range of health and lifestyle factors.
* Industry claims data
The protection industry has been publishing ‘claims paid’ statistics for more than 10 years on most products yet people still expect insurers to try to avoid paying claims. Drewberry Insurance, for example, published a 2015 consumer survey that showed on average people believe insurers pay claims just 50%of the time.
Advisers can add a snapshot of claims paid to their website to help prove insurance pays out when it is needed. Alongside most providers announcing their claims statistics individually, each year the ABI publishes industry-wide figures on what the protection industry has paid out in total. The latest ABI figures reveal that, during 2013, the protection industry paid £3.1bn – or £8.4m every day – in individual protection claims, to 99,000 families, and 97% of protection claims were paid. Further stats, and breakdowns by product, can be found here.
* Shortfall calculators
Shortfall calculators can give clients a good indication of their protection situation before going through the full advice process. While often a fairly crude calculation, this can provide a simple starting point for the client in terms of their current situation and an indication of what gaps they have.
Advisory firm London & Country, for example, has a life cover shortfall calculator on its website that – after going through outstanding debts, expenses to be covered, number of children, existing cover in place and general income needed month-to-month – calculates the shortfall of life cover in place. Similarly, most insurers provide tools for advisers to use with clients to calculate the shortfall in life cover or income protection and the implications of relying on state benefits.
* Business protection calculators
With some 24 million people on their payroll, small businesses are collectively the largest employers in the UK, but losing a key person to illness or death can have disastrous consequences. A report from Legal & General showed two-fifths of small businesses would cease trading within a year of losing a key employee or owner, yet three-fifths do not have any cover in place to protect against this risk. Issues that can arise include loss of profits, loss of business contacts and specialist knowledge, or having to repay a loan made to the business.
Most insurers offer business protection tools that can help to highlight the vulnerability of a small business and whether products such as key person cover or shareholder protection should be investigated. Vitality also offers a risk calculator for small businesses. Multiple employees can be entered according to age, with the tool calculating the percentage chance of them passing away before retiring, helping to highlight the position the business would be in if the worst happened.
* Protection top tips
Providing clients with online guides, top tips and the ‘dos and don’ts’ of buying protection is a simple way of arming people with information before they take advice and helping them to avoid the pitfalls of making a protection mistake. Drewberry Insurance, for example, includes a number of guides on its website, including the top 10 income protection questions asked by clients, how to reduce the cost of income protection, top reasons you do not have income protection and a guide to own occupation policies.
For its part, protection specialist LifeSearch includes a guide to protection on its website and answers commonly asked customer questions while Beagle Street offers guides to buying protection for people with specific circumstances, lifestyle habits or illnesses such as smokers, pregnancy, hazardous hobbies, cancer and diabetes.
Adviser-Hub’s own client-friendly and professionally designed protection-related guides can be found here
* Budget planners
When buying protection, one of the starting points – and most useful exercises – for clients is to produce a budget planner of their current expenditure. Either an online interactive or downloadable form could be added to an adviser site to collate all areas of family expenditure, including mortgage payments, bills, cars, loans, entertainment, shopping, food and so forth. This allows people to see if their finances would stack up if an income was lost, if they could survive on their current protection provision or state benefits, and also to examine how they currently spend their money and if simple savings can be made.
Here is also one of the most common sales tips from adviser firms – if you ask a client to print off their monthly bank statement (easily done these days with online banking) and ask them to begin crossing through the things that would stop if they had no regular income, the process can be quite illuminating. Most people do not finish the job, of course, because it becomes too difficult – but that in itself demonstrates the need for protection.
* Real life stories
Including examples of real-life protection stories on your website can help bring home the value of a claim being paid. Might one of your clients agree to being featured on your website –as somebody who has either bought cover or perhaps made a claim? Or could you obtain a local business endorsement?
The charity-led industry campaign Seven Families is currently raising awareness of the need for income protection through the stories of seven families across the UK, who lost an income without financial support in place. It is providing them with the equivalent of an income protection policy, including financial support and access to support services such as rehabilitation and counselling.
The stories are told through easily accessible films, featured on the campaign Facebook page, which focus on family life and the impact of illness or disability rather than protection products. The films can be linked to or hosted on adviser’s websites as an engaging and emotive way of showing clients how essential protection can be. You can find more information on the campaign here.
* Money saving tools
While a protection policy should not be sold on price alone, it is often the main motivator for people to take out or switch cover. Some advisory firms such as London & Country include cost calculators on their websites to show whether people could save money on existing cover, if they switched to a newer style policy or different provider. While care needs to be taken – particularly around critical illness policies, where the conditions covered change over time in line with medical developments – it can be a good opener to assessing people’s protection needs in more depth.
* IHT and trust tools
Many insurers offer advisers online tools and calculators to easily assess whether clients will face a potential inheritance tax (IHT) bill in the future and, therefore, whether it is essential that any protection policies are placed in trust – either to cover the IHT liability or remain outside of the estate.
Many insurers also have tools or dedicated sites that could be linked to or hosted on advisers’ websites, allowing people to place new and existing policies in trust, from any provider, making the process as simple and time-efficient as possible.
Finally, if you find yourself short of inspiration, you could take a look at your competitors’ website or those of the banks and large protection distributor firms. Seeing what ideas they have had could also help your business.