Intermediaries urged to understand benefits when promoting protection during pandemic

Mortgage intermediaries who are seeking to increase protection sales have been urged to ensure they fully understand the added-value benefits included within these insurance products.

Not only is this a much more compelling sell but the better informed that intermediary is, the better they are able to support their clients, according to RedArc, a third-party nurse service often included within insurance policies.

Protection insurances such as life insurance, critical illness insurance and income protection insurances, no longer just offer a financial pay-out in a time of crisis but also offer a wealth of other types of support including medical, and emotional.

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Christine Husbands, managing director of RedArc, said: “It is widely known that many mortgage intermediaries turned their attention to protection products in lieu of mortgages as COVID-19 stalled the housing market, and if this results in clients being better protected, that is a very good thing.

“However, protection is no longer just about getting a lump sum. It is important that advisers make clients aware of the support services included within these products so that their client can make an informed choice about the whole package of benefits, not just be focussed on the potential financial pay-out.”

In many cases, added-value services within protection products support the customer and their immediate family during the lifetime of the policy, even when no claim is made.

And of course, when claims are made, such as after a major accident, illness, trauma or bereavement, a financial pay-out is valued but it doesn’t stop the long-term emotional stress of dealing with day-to-day life.

Husbands added: “Many insurers should be commended for the breadth and depth of support that is now available within their products.

“However, unless the intermediaries on the front line of giving client advice take the time to understand what’s available, they cannot possibly communicate it to their clients.

“That can mean a client is more likely to buy on price instead of value. And even when added value is included within a policy, the adviser needs to make it crystal clear to what extent and how to access it.”

There are huge variances in the types of added-value support that is available and so RedArc urges mortgage advisers to ensure they are comparing like-for-like before discussing a selection of products with their clients. Some providers will not include any support, others will offer very ‘light-touch’ support which might include a set number of counselling sessions or limited support via a wellbeing app.

“However, others will offer more comprehensive support tailored to the specific needs of each individual, available for as long as the client needs it.

“Particularly with many brokers needing or wanting to reconfigure their business model due to the COVID-19 pandemic, I’d advise mortgage intermediaries to familiarise themselves with this aspect of the protection market in order to provide the most appropriate advice to their clients.”