People are seeking greater health & financial protection and value-added benefits are providing the solution. Read more about the many new value-added benefits you should be talking to your clients about.
A traditional problem wrongly associated with Value-Added Benefits (VABs) has been their reputation as unnecessary extra costs. Add to this that most people are asked to take out such policies at the precise time they are trying to save money, and it’s no surprise that many advisers simply overlook them, not wanting to waste their time or risk upsetting clients.
However, this was before the pandemic, and as with everything else, Covid is disrupting the UK financial advice sector. Ongoing uncertainty, increasing focus on health and the growing desire for wealth protection, are causing more people to seek financial security. As a result, VABs have emerged as a desirable product for clients and a strong selling point for advisers.
Wanting to meet this demand, insurers now offer specialist products linked to health, lifestyle and property management. Available across plans, including life insurance, critical illness and income protection, these products are required by both individuals and corporations because of the important protection and peace of mind they provide. Here, we look at some of the biggest advantages to VABs.
Changing outlooks
Ongoing uncertainty caused by the pandemic is creating new financial pressures for people. This, combined with changing life perspectives, is leading many to think about their futures much more seriously. A recent survey by Prudential revealed 18% of people questioned were worried about reduced income, while 17% admitted to fears of being made redundant.
Such issues are also observed in the UK mortgage industry, with approximately half a million people reportedly in rent or mortgage arrears due to the pandemic. Furthermore, roughly 130,000 households are currently taking advantage of mortgage payment holidays. Whilst such issues are not new, they do present an opportunity to show clients that you understand their concerns and educate them on the many valuable services available and the important peace of mind they provide.
Growing demand for health protection
The pandemic has rightfully highlighted the need for quality health protection, with mental health in particular receiving lots of attention. A recent survey by the Mental Health Foundation, the UK’s leading mental health charity, revealed feelings of ‘hope’ remain far below pre-pandemic levels, whilst those of ‘loneliness’ stood at 26% in February this year, more than double its March 2020 level of 10%.
Reflecting the growing importance and demand for health protection, UK insurers offer a range of mental health VABs, including those dealing with anxiety, depression, addiction and PTSD. These provide valuable reassurance and professional counselling as and when a client requires. Despite growing demand for such protection, large sections of the public remain completely unaware that such products exist and are affordable. Additional advantages related to VABs include:
- Additional protection for a policyholder’s partner & family
- Cover for life of term (not just point of claim)
- Choice of telephone, email and video call appointments
Generation X becoming generation protect
The pandemic is also increasing financial awareness among young people. Whilst a small minority remain influenced by dangerous, high risk trends such as crypto currency, the majority are turning their attention to safer, more traditional methods.
This presents you with a great opportunity to reach a lucrative but often difficult-to-access market. Whilst issues and misconceptions have existed on both sides, it is the attitude of young people that has changed first.
This shift and the ‘on-message’ benefits of VABs present an excellent opportunity to reach out to younger people and highlight the many different short and long-term benefits that come with expert financial advice. Furthermore, the increasing use of technology to research and deliver advice is another positive move that must be highlighted by advisers. VABs provide an excellent opportunity to show new and existing clients both your expertise and commitment to their health and financial security.