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Three years on from the COVID-19 pandemic, its impact and fallout can still be felt. The panic and angst amongst the population had the general public confined to their homes, concerned that their loved ones might be left vulnerable if the worst was to happen. This is why the number of people with life insurance policies in the UK skyrocketed, with 35% of Brits now owning a policy according to a survey conducted in 2022. And while the figures are continuing to steadily increase to the benefit of both the public and advisers, it’s still not quite at the place where we would like it to be. In an ideal world, everyone would have the necessary life insurance policy in place that would pay out a lump sum to the policyholder’s dependents in the event of their death, because not having these sorts of provisions in place can result in your customers facing significant stress in terms of managing their finances, while also grieving for their loved one. In this article, we will explore the optimal times for having the discussion with your customers about what life insurance is, and how you can put to rest some of the concerns they might have with arranging such a policy.

Why Might Customers Refuse Life Insurance Policies?

Just like we did in our previous article examining Income Protection Insurance, we will look to identify some of the driving causes behind customer’s hesitation in taking out a life insurance policy. Perhaps the biggest reason a customer might refuse to arrange a policy is because they think it is too expensive. This is a common complaint and one you can understand in the midst of a cost-of-living crisis. If a customer is already sat down with you battling the rising mortgage rates and determining whether or not they can afford to remortgage their home, it’s unlikely they’re going to respond well to an added cost like taking out a life insurance policy, or even paying for a life insurance quote. In fact, despite 6 in 10 UK households recognising the importance of the policy, up to 35% feel that it is simply too expensive for them. On the other hand, over 40% admitted to not knowing how much a life insurance policy costs, which means there might be a large proportion of your customer base who are yet to make up their mind as to whether they need a policy simply because they don’t have all the facts yet.

Aviser offering a Life Insurance Policy to their customer

When Should you Speak to Customers about Life Insurance?

So what can you do as an adviser to ensure that you get your customers to sit down and engage with the facts when it comes to life insurance. As an adviser sharing all the facts with your customers is not only your obligation under the new Consumer Duty Act, but also because you don’t want to shackle someone with the financial burden of running a household while also dealing with the grief of losing a loved one. Since so many members of the public seem to either have the perception that life insurance would be too expensive or simply do not know how much a policy would cost, you can get in contact with our panel of providers to arrange a quote and then go from there.

But when is the best time to have the conversation, which will lead to you arranging more cases? Well there are actually a number of factors which lenders take into consideration when arranging a policy on behalf of your customers which will impact the overall cost. So ideally you would want to get your customers set up with a life insurance policy before or in preparation for a major life event, which would in turn affect its cost, which you can read about below:

  • Age – The age of your customer plays a huge role. Firstly, if you’re customer is relatively young they may feel life insurance is not necessary simply because they are healthy and don’t expect to die anytime soon, which is sound logic. But it’s still important that they understand the financial implications their sudden passing might have on their dependents.
  • Over 50 – On the other hand, if your customer is a little older, perhaps over the age of 50 it is essential that they are protected due to the increased likelihood that they have dependents, a mortgage to pay off and other regular outgoings. Speaking to providers would be a good start especially those who state outright that they offer exclusive Over 50 Life Insurance plans.
  • Number of dependents – Customers who have recently gotten married or have recently welcomed another child may want to have the conversation about life insurance so that they can take comfort in knowing that if anything did happen to them, then their spouse and children would be taken care of financially through the lump sum pay-out.
  • Change of career – Whether your customer has received a promotion at work and is now benefitting from an increase in income or has been made redundant and now must work more within a budget temporarily, a change of career is a good time to discuss arranging a life insurance policy. Of course, convincing your customer who has recently lost their job to commit to an outlay of funds like this might be a challenge but it goes to show how quickly life can change and why making sure their family is protected is important.
  • Medical diagnoses – In the process of finalising a claim, a customer’s medical history will be examined (unless it is a designated Over 50 policy). If your customer has recently been diagnosed with a medical condition which could have long-term implications, then it’s important that they know what their options are when it comes to managing their finances.

Get in Contact with our Panel

As an appointed representative of PRIMIS Mortgage Network, you will have access to our full list of providers, which you can view here. For the comprehensive list of providers who are capable of arranging life insurance policies for your customers keep reading below. Get in contact with any of them now so that you can point your customers in the right direction the next time they sit down with you and ask about life insurance quotes.

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