25/07/2017 Jeremy Duncombe, Director, Legal & General Mortgage Club
When it comes to protection, there is often no better opportunity to talk to clients about this vital product than when they apply for a mortgage. After all, it’s much easier to picture the potential impact if there is a home at risk should they lose their main source of income and can’t keep up their mortgage repayments.
However, protection has always been a hard sell. Nobody wants to think about becoming ill or passing away. Even if you’re raising the protection conversation with a natural prompt like a client’s first mortgage, lengthy applications can leave advisers little time to have this important conversation.
Every day, families across Britain face tragedies that they are sadly financially unprepared for. Whether it’s a job-loss, accident, critical illness or the death of a loved one, the resulting loss of an income can have a devastating impact on a family’s financial wellbeing. Yet, despite the severity of this risk, the UK continues to suffer from a ‘protection gap’ - thousands of people across the UK lacking the savings or protection they need to help them overcome the financial impact of a critical event.
In many cases, it can take a life-changing event, such as serious accident or critical illness, for an individual to realise the value of protection. However, advisers have a better chance of talking to their clients about these important solutions, if they can help them visualise the impact of losing their income.
At Legal & General, we are passionate about addressing the protection gap, and to help advisers in raising awareness about the potentially damaging impact a loss of income could have on an individual and their family, we recently published our 2017 Deadline to the Breadline report. The results speak for themselves:
Without insurance, workers are continuing to leave themselves at significant financial risk, should they suffer from a critical event. Less than a third (31%) have a life insurance policy, whilst fewer still have cover in place to help them meet monthly mortgage repayments (9.7%). Less than one in 10 (9.3%) had an income protection policy to support them if they lost their job.
Even with the natural prompt of a mortgage application, selling protection can still be a challenge. By using our Deadline to the Breadline research to reinforce the reality how a loss of income could impact your clients’ finances, we hope that advisers face a much less challenging task closing the protection gap.
Find out more and use our Deadline to Breadline calculator.