Ensuring your clients have the right cover is more critical now than ever before.
The coronavirus outbreak has come with a range of new challenges that most would have not foreseen, and impacted individuals and their families, as well as businesses and the global economy as a whole.
As a result, our job and financial security has now become a greater concern. The UK government has implemented several measures to help minimise the short-term financial damage of coronavirus. However, there is still great uncertainty about what the future holds for the economy and levels of unemployment, which emphasises the importance of helping your clients get the right cover in place for their needs.
Protection gap
Your clients can protect numerous aspects in their life from the unexpected; such as their cars, pets and mobile phone. Yet protecting themselves is oddly less common. As a result, the ‘protection gap’ (the difference between the insurance cover that people would ideally have and what’s actually in place) is rather steep. For instance, figures from the Association of British Insurers (ABI) suggest that of the 26.7 million households in the UK, just 300,000 have an income protection policy in place.
Now that many sections of the UK population are unfortunately more likely to be exposed financially in the current climate, and more so if they were to suffer a financial trauma such as an illness or injury that affected their ability to earn – getting your clients the right protection cover has never been more pressing.
Affordability & budget
There are a range of protection policies to suit all budgets. But it is important that in all circumstances that the client must be able to afford the premiums of the policy recommended for an identified protection need. For clients on furlough, there is uncertainty as to how best determine their future income and budget at this time. Yet by helping the client to get some level of affordable cover in place is better than there being none.
Medical screening, reports & non-medical limits
At this time it is challenging to get either medical screening or medical reports to aid a policy being approved. Some providers are looking at alternative ways of delivering medical screening such as via video conference with a self-test kit which is an innovative step to address this issue. Whilst securing a medical report from a GP will take time to gain. Yet it is still worthwhile submitting an application to a provider who will continue to underwrite a policy rather than just writing to non-medical limits.
All insurers have a ceiling for what level of sum assured they will offer without requiring any medical evidence. This ceiling reduces the older the client gets. These non-medical limits vary across providers due to their risk appetite.
Certain providers will cover a client up to their non-medical limits in the absence of any medical evidence. This is relevant for applications that would normally trigger a requirement for medical evidence which may be due to the client’s age, level of sum assured applied for or any pre-existing medical condition.
Advisers should therefore refer to the non-medical limits of providers to determine whether this would impact their clients.
Available protection support & guidance
During these uncertain times, advisers have a duty to consumers to ensure they are educated about the importance of putting adequate financial safeguards in place, particularly protection. Whilst also checking in with existing clients to make sure that even if their finances are under pressure, they are not cancelling their life insurance or other protection policies in a bid to cut their outgoings which could leave them vulnerable possibly in the future.
At Tenet, we have upped our protection support for our members. So if you need to brush up on your protection expertise? Require technical assistance? Or need to refer a client for protection advice? Simply get in touch at protection@tenetgroup.co.uk and we can give you the support you need.
