Why do we discuss protection with our clients?

 
I've decided to write about this because in my ten-year career as a mortgage adviser and later as a financial adviser, I've encountered rather negative perspectives from clients regarding the need for protection and the associated products. Comments like 'I only need a mortgage; life insurance or income protection isn't for me' or 'I'm just not interested' are quite common and have been noted by many advisers in the industry.
 
I understand that arranging protection cover as part of a mortgage application or broader financial planning process can be intimidating. It involves contemplating financial or physical misfortunes, including critical illness and death, which very few of us want to think about.
 
However, this is precisely why mortgage brokers and financial advisers should always place discussions about protection at the core of their conversations with both new and existing customers. These insurance policies can shield customers and their families from financial catastrophe. Over the past two years, the Covid-19 pandemic has served as a stark reminder that such risks, from unemployment to premature death, can impact anyone.
 
In the financial industry, we have a moral obligation to ensure that our customers are safeguarded against the worst-case scenarios as they take on what may be the largest debt of their lives. We often ask questions like, 'How will your family cope if you cannot work anymore? What will happen if one of the main family earners passes away? How will you continue to pay for your mortgage, maintain your lifestyle, support your children's education or clothing needs?'
 
These questions don't stem from our desire to sell financial products but from our understanding and, in many cases, personal experiences that once you secure your mortgage and your dream home, you'll want to keep it, even if a terrible misfortune befalls you or your family. An appropriate protection policy can do much more than safeguard your mortgage debt; it can provide access to additional medical care, early diagnosis, or simply offer you peace of mind during a serious or long-term illness without the financial worries that can affect the entire family.
 
It's also worth noting that we, as advisers, fully appreciate the financial constraints many household budgets are experiencing at the moment. We're facing rising mortgage costs, inflation, and spending cuts that most families have to endure. This makes discussions about protection policies even more critical, as our budgets are even more sensitive to unforeseen circumstances like illness or death. Protection policies don't have to be exorbitant in cost but can provide you with better sleep during uncertain times.
 
I'm writing this article because our firm is currently assisting one of our long-term clients with a critical illness claim on a policy, she considered canceling just six months ago. So, don't delay—talk to your broker or financial adviser about how they can help you and your family manage the essential risks of everyday life.
 
 
Kat Chiva DipFA, MLIBF, CeMap, CeRER
Haverfords Director