What’s on the menu?
Helping clients choose the right protection
Establishing and maintaining conversations with clients about protection is one of the core challenges faced by advisers. But does talking clients through their available protection choices need to be so difficult?
John Brazier, Editor, COVER
We hope you find this guide useful.
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Menu plans can give advisers a clearly defined and easy to understand range of options to present to clients, offering protection that is both tailored to specific individual needs and within their budget. However, advances still need to be made in several key areas, such as using clearer terminology and compelling real-life stories, as well as technology that simplifies decision-making and helps clients balance their priorities.
COVER has teamed up with Royal London to look at the way forward and to explore a new menu tool designed to ease and speed up discussions. Along the way, leading advisers offer their take on the key conversational pressure points and their tips for powering up your talks about protection.
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The key problem is that advisers must navigate the needs and budget of each client towards a variety of cover types and decision points. There is also an education gap to consider, with industry research showing that clients can be confused by the array of products and language used.
Protection Q&A
Overcoming Hurdles
The Menu Tool
IP Tips
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Talking about protection
Q&A with Ian Smart
Conversations about protection can be challenging and often get lost amongst broader financial planning discussions with clients. Ian Smart, Product Architect at Royal London, identifies the key challenges and explains how menu plans – and innovative menu tools – can ease the client’s route to making these critical decisions.
The biggest challenge is the pre-conceptions many people have: that misfortune won’t happen to them, that protection is expensive, and that it won’t pay out. There’s also a lack of understanding of what each type of cover provides with many people not clear about the differences between, for example, income protection and critical illness cover. Protection is also often spoken about as part of the advice process for another product such as a mortgage. It can therefore be a challenge to get across the importance of protection as part of what may already be a lengthy process.
What challenges face advisers when talking to clients about protection?
How can menu plans help?
Most clients have a number of needs but a limited budget. A menu plan can be tailored to both the client’s needs and budget and can be cheaper overall than multiple policies.
How is Royal London helping advisers have better conversations about protection?
We recognise there is more to recommending protection than just the product and the price. That is why we provide a series of tools to help advisers with the conversation with their clients and ensure that their policies are set up in the right way to achieve their desired outcome.
How can you build value through a menu plan?
How exactly can menu plans help you build more holistic protection for clients and add value to your business offering? The Royal London team say the advantages lie in the 4Rs:
Risk
Bridging the gap between affordability and responsibility. Allowing you to recommend solutions that provide some level of protection to suit your individual customers’ needs and budget. Managing risk when it’s needed most with multiple opportunities to claim.
Revenue
By mixing and matching covers, you can usually create a solution that’ll fit your client’s circumstances. By tailoring a package in this way, you can offer more solutions to more of your customers - creating more income for your business.
Retention
Building a bespoke solution makes your advice harder to copy. And a plan that has the flexibility to change with your client’s needs helps to create future advice opportunities.
Reputation
It’s when, unfortunately, that there’s a need for a client to make a claim, that the value of your advice pays off. Having cover that provides valuable financial assistance alongside practical support such as Royal London’s Helping Hand can only enhance your reputation as an adviser. If a Royal London plan holder experiences serious illness, injury or bereavement during the term of their plan, Helping Hand* gives clients access to a dedicated nurse who'll provide tailored and personal support for as long as they need it. Even if there is no claim.
What are the specific value-added benefits of Royal London's new menu tool?
Sitting as part of our pre-sales protection tool suite, this new tool highlights where broader menu propositions could offer customers more chances of claiming than a traditional life or critical illness sale. Advisers can input some basic information about their client and get a series of indicative quotes showing how a menu plan could be put together in various ways.
What is the message you most want to convey to protection advisers?
Protection should be the cornerstone to any financial planning as for most people so much depends on their ability to earn a wage. It is therefore essential that we have those difficult conversations and show them the risks they are facing if they don’t have the right kind of protection in place. Our menu tool is designed to help start those conversations and show just how likely it is that someone will have to make a claim. Rather than ‘I can’t afford it’, they may need to turn their thoughts to ‘how can I afford not to?’
revenue
retention
reputation
Ian Smart, Product Architect at Royal London
The new menu tool draws a direct comparison to the cost and chances of a claim being made on a simple life or critical illness cover plan against a combination of separate life cover, critical illness cover and income protection at various levels and including different options. This gives the adviser an easy way to introduce the idea of other types of cover the client may not be aware of, or might have thought they couldn’t afford, before moving on to obtain a more tailored quote, depending on the client’s needs and priorities.
Our new menu tool is part of this effort, but we also provide webinars discussing various topics across personal and business protection; marketing support such as allowing advisers to produce sales aids with their own logo to use with their clients; and more generic information for example around the taxation of, and the use of trusts with protection. Advisers can use this support to explain why a client’s plan is being set up in a certain way and the benefits this brings.
Such plans allow advisers to provide some cover for all of those needs without having to complete multiple applications and without the client having to keep track of multiple policies with different providers. And by providing a breadth of cover – increasing the chance of a claim rather than maximising the claim amount for one type of cover – you can make sure a client isn’t left asking ‘Why did my adviser not tell me about this?’ when something happens to them that wouldn’t otherwise have been covered.
*Helping Hand is a package of support services provided by third parties that aren't regulated by the Financial Conduct Authority. These services aren't part of Royal London’s terms and conditions so can be amended or withdrawn at any time.
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Overcoming hurdles
Getting the conversation started
Some of the industry’s leading advisers share the most common hurdles they face when talking to clients and how they overcome them
Customers do not understand that they need protection
It is important to put the customer in an “educated position,” says Lucy Brown, head of protection for L&C Mortgages. “This is about helping them understand why they might need cover through an outcome-based approach, working through ‘what if’ scenarios together.”
According to Matthew Chapman, commercial director for Plus Financial, “dispelling myths [about insurance] and getting the clients to see the true value in having cover can be a major obstacle. I do this by using practical and simple examples of how things can go wrong and where protection can make a significant difference in their lives should something untoward happen,” he says.
Customers often do not understand what types of cover are available
“Helping clients understand the differences between types of protection can certainly be challenging and often the terminology doesn’t help,” explains Rob Harvey, head of protection at Drewberry.
Most advisers will agree that it is important to explain the different types of policy available by talking about the benefit they provide as opposed to product names, using plain English rather than jargon.
According to Chapman, “most clients approach their protection needs back-to-front”. “Many have heard about or understand life insurance and so tend to mistakenly begin there,” he says.
Ria Wotherspoon, an adviser for City Finance Brokers, argues that it is up to the adviser to make sure they are up to date with product changes and offer regular reviews. “They should know which products are right for the client and comparison tools are fundamental in final checks to make sure they are getting the best cover at the best cost,” she says. “I’m the adviser, not the decision maker! All my clients know the end choice is theirs.”
Convincing clients they might need more than one type of cover can be a challenge
“Another obstacle is explaining why the client ought to consider having multiple types of cover to meet specific risks and needs, and to allow for flexibility and changes to their circumstances both now and in the future [in case they change],” says Matthew Chapman.
As Naomi Greatorex points out, clients need to understand how the types of cover are different, and why they are important. “There are a lot of options,” she says, “and helping clients navigate through this with clear information, and using easy to understand language is really important.” Real life examples, including personal experiences and examples of when the clients can claim, can also hit home the message.
According to Wotherspoon, a menu plan can help advisers offer multiple covers with a discount and combine everything under a single direct debit for the customer, though sometimes separate policies are appropriate due to the different benefits required.
Cost can often be a sticking point for customers
“I regularly speak to people who are taking out mortgages, who feel at outset that protection is just another expense,” says Naomi Greatorex.
Naomi says she talks about what difference a tax free lump sum would make at the point of being diagnosed with a serious illness, but also explains both budget and long term income protection to clients. “Some may choose to take a reduced critical illness amount with some budget income protection,” she says.
L&C’s Lucy Brown suggests that cost should be presented early on in the conversation “so that customers know cover can be tailored to budget and is often much more affordable than they might think.”
Advisers will tell you that while protection should be a no-brainer for many clients, convincing them they need it is not always straightforward.
Getting clients to see the true value in having cover can be a major obstacle”
Matthew Chapman, commercial director for Plus Financial
In fact, consumers often come into conversations with a financial adviser armed with a long list of misconceptions about protection, its value and what it actually is.
In order to get a better idea of the barriers advisers frequently face when talking about protection – and what they do to jump over them – we asked them to tell us all about it.
3 tips to make adviser lives easier
Naomi Greatorex, managing director, Heath Protection Solutions: “Anything that helps paint a picture for clients is really helpful. I think that when giving protection advice this is the most important part of the role. Helping people visualise the benefits of protection and the support that it gives is what all good protection advisers should be aiming for in my opinion.”
Rob Harvey, head of protection, Drewberry: “Menu plans are obviously great and certainly make the process easier, but the three main factors of price, quality of the proposition and underwriting all need to line up to make the overall solution viable. In terms of communicating the differences, I’m definitely not a fan of the policy documents that list every type of cover in one single ‘policy terms’. This just causes confusion for both clients and their advisers. Simple visual aids, in an easy to digest format are the best approach.”
Lucy Brown, head of protection, L&C Mortgages: “Having more support material from providers could help educate clients too, as it could re-emphasise the benefit of taking cover with a particular provider. Often material from providers is aimed at the adviser and doesn’t use customer-friendly language. Let’s not forget that designing products that are relatable and explain what they do clearly would also help customers to better understand the difference between the different types of protection available.”
“I’m the adviser, not the decision maker! All my clients know the end choice is theirs”
Ria Wotherspoon, an adviser for City Finance Brokers
I get round this by explaining the likelihood of various scenarios and by helping them to see the importance of protecting their income first and foremost, often by getting them to question how they will even pay for the premiums for their other plans without one!”
“All of these obstacles are ultimately really tied into price, or clients understanding the value. I think it is also important to recognise that as a client’s budget is probably tight at this time, some protection is better than none.”
“By putting these options in a flexible plan this feels like it’s an insurance tailored to their budget, which they can add to later. Thus offering flexibility and value for money.”
The menu tool
Royal London's marketing studio offers a wide selection of marketing materials to help you make the case for protection.
Click here to explore
Protection Q&A Talking strategies The menu tool IP tips
The Menu Tool Tip
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It’ll save you much more than 30 seconds over the next year…
Making protection conversations easier
Clients have different needs, circumstances and budgets - a menu approach helps advisers mix and match a range of covers. Royal London’s new menu tool's indicative examples can help you build successful menu conversations.
They’ll be able to see an example cost of their required menu of cover, compared to traditional options, and examples of different levels of cover types (Essential, Essential Plus, and Comprehensive). Royal London’s animation below shows how this supports your client conversations. Take a look and then try out the tool itself.
Answer three basic questions about your client.
Then fill in their birth date, gender, smoker status and salary.
Talk your clients through the results.
Priming the tool takes around 30 seconds and is simplicity itself:
Step 1.
Step 2.
Step 3.
Try Royal London's menu tool
IP tips
Income protection
Cutting through the conversational challenge
Sometimes a hard-hitting dose of reality can be effective. I’ve had a number of clients claim on policies arranged by me, from minor short-term ailments to serious life-changing illnesses. I use those stories to explain what can happen when someone is protected, and to get people to imagine the consequences of being uninsured. There’s also a massive opportunity to promote additional benefits such as nurse support helplines as being a much more central part of the cover with everyday benefits.
We asked advisers why income protection is often overlooked and how they craft successful conversations.
Robert's tip
72%
of UK adults say they have not considered income protection
Source: AMI Viewpoint: The New Protection Challenge, November 2020, p.28
ROBERT HARVEY, Drewberry
For consumers, the difficulty often comes down to confusion about what income protection is and does. I’ve lost count of the times clients have assumed income protection covers redundancy as well as ill health. Lots of people assume that the state will look after them, when for most households, that safety net falls well short. Advisers themselves may still think income protection is too complicated, with drawn out application and underwriting processes, or that clients don’t need it because they’re high earners or have lots of assets – often faulty assumptions.
LUCY BROWN, L&C Mortgages
Advisers potentially overlook talking about the income protection due to the associated complexity: explaining deferred periods, the option of short-term or longer term income protection, whether you take level or age-costed premiums, to name but a few things, can be mind boggling.
Lucy's tip
Helping a customer to think about ‘what would happen if my income stopped tomorrow’ makes the need for income protection much clearer. Working through what bills would still need to be paid, how much outgoings are each month, and how long those payments can be managed from savings, work benefits, and support from partner or family brings the necessity of protecting your income to life.
MATTHEW CHAPMAN, Plus Financial
I apply the KISS principle when discussing income protection – Keep It Super Simple! Clients are less interested in the product and more interested in the NEED. Through simple, topical, relatable explanations, most clients end up seeing significant value in a product like income protection. At this point, cost becomes less of an issue.
Matthew's tip
Being able to highlight the total potential value of the contract over the full term is a great way to compare the total value against the cost of the plan. It also helps when comparing against products such as critical illness cover, where there can be a misguided view that a lump sum is preferable to a regular income. Another way to highlight this is to show the average length of an income protection claim.
NAOMI GREATOREX, Heath Protection Solutions
Income protection is regularly overlooked by employed clients as they feel their employer will pay sick pay, and lots of self-employed people are unaware that this type of insurance would cover them. As the recent AMI study showed, people have a very limited understanding of income protection, how it works, when it will pay and who can take this insurance out.
Income protection is usually the first type of cover that I highlight to clients: what would happen if your income stops? What benefits do you get from your employer or would you have to rely on Statutory Sick Pay? How would you continue to meet your financial outgoings? It’s about helping clients understand the risk and how you can help if there is a concern over cost - talking through the barriers and looking at possible solutions. I also use real examples: personal stories help me the best.
Naomi's tip
Only 31% of UK adults can correctly identify what income protection is
Source: AMI Viewpoint: The New Protection Challenge, November 2020, p.8
RIA WOTHERSPOON, City Finance Brokers
It’s a traditional mentality to offer ‘life and critical illness cover’ straight away, especially if mortgage-linked, but my style of broking is different. I never overlook income protection. All products are discussed and then we lean towards those matching the clients concerns/budget. The facts don’t lie: income protection is the most claimed on one out of the three!
Good techniques to help clients understand income protection are referring to it as their own private long-term sick pay, that they’re in control of. Also, comparing it to critical illness cover is a great way to show the pros and cons to both products.
In short
Customers underestimate income risk Most don’t understand what income protection is and does Frequency/length of payout often not understood
Top tips
Focus on customer needs – talk about income protection early on Explain the difference and value of income protection versus critical illness cover Use real-life stories
Why is income protection overlooked?
Robert Harvey, Drewberry
Lucy Brown, L&C Mortgages
Matthew Chapman, Plus Financial
Naomi Greatorex, Heath Protection Solutions
Ria Wotherspoon, City Finance Brokers
Ria's tip
Income Protection
Listen to Shelley for further tips on how to develop your income protection conversation
Shelley Read, Senior Protection Development and Technical Manager
A new podcast from Royal London
The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL. Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance companies. The firm is on the Financial Services Register, registration number 302391. Registered in England and Wales number 4414137. Registered office: 55 Gracechurch Street, London, EC3V 0RL.
Important information
Source: AMI Viewpoint: The New Protection Challenge, November 2020.
