Effective factfinding for protection clients

Kathryn Knowles, award-winning protection adviser, shares her tips to help you find the best protection insurance solution for your clients’ needs.

Kathryn Knowles
Kathryn Knowles

When it comes to protection insurance, there is sometimes a mindset that it’s pretty easy to do. But, there are so many quirks with these policies and there are many aspects of your client’s circumstances that can really affect the insurance options.

The main things for you to focus on are:

●     What are their current arrangements to cover lost earnings if they are ill and unable to work?

●     Is there anyone that is financially dependent upon them?

●     Do they have any financial liabilities such as a mortgage and is there anyone that might inherit that debt?

●     Not everyone sees the need for or wants protection insurance, it is your job to show them how vital and life changing these insurances can be.

Protection insurance is usually arranged due to the following concerns,

●     Financial safety if the client becomes ill

●     Making sure that their loved ones are financially secure

●     Comfort in retirement

Once you have established the client’s objectives and are starting to form the recommendation in your head, your research can start.

You can just do a simple quote comparison, choose the cheapest provider and go straight into an application with your client, without doing research first about which insurer and policy types will truly be right for them. Just because you can do this, doesn’t mean that you should. Without knowing the following details and completing your research, you cannot manage your client’s expectations of what the offer of terms might be,

Use of nicotine or tobacco in the last 12 months - some insurers ask up to the last 5 years.

Medical conditions - do not assume that a mild or common condition is going to be smooth sailing. It’s a good idea to ask the following questions,

●     When were you diagnosed with this condition?

●     What are your symptoms?

●     When did you last experience symptoms?

●     What medications or treatments do you use?

●     Does it affect your day to day living or ability to work?

Height, weight, waist measurement / dress size.

Alcohol consumption - it’s a really good idea to check if they have ever been told to reduce their alcohol intake.

Drug use - any recreational drugs, or misuse of prescribed drugs.

Family medical history - before the age of 60 or 65 depending upon the insurer (blood related parents and siblings only).

Hazardous sports - remember that motorbike riding and horse riding come into this, again don’t make assumptions that a simple recreational hobby will be ok. These questions will give you a good basis to do your research, 

●     What sport do you do?

●     Do you do this as an amateur, semi-professional or professional?

●     Are you a member of any professional bodies?

●     Do you hold any qualifications?

●     Are you in a group or solo?

●     Do you do this solely within the UK?

Travel - are they going out of the UK for more than 30 days at a time on holiday, or for more than 1 week for work.

Occupation - it’s important to make sure that you check this with no assumptions on what the terms might be, the higher the class, the higher the ‘risk’. Some examples are,

●     Class 1 - Administrator, Accountant, Scientist

●     Class 2 - Salesperson, GP, Nail Technician

●     Class 3 - Electrician, Teacher, Yoga Instructor

●     Class 4 - Builder, Cleaner, Tennis Player

You cannot guarantee the policy types available or the premium to your client, without having all of this information.

With the health and sports discussions the questions above are a starting point. The underwriters at insurers are incredibly helpful if you need to ask them more details about a specific disclosure that your client has. Give them a call, tell them the risk and ask them for their advice, what do you need to know, so that the underwriter can give you the most accurate indication of terms.

Key Points To Consider

●     If your client is part of a couple, make sure to ask what protection their partner has, they are likely to be the beneficiary and should be aware of what is being arranged.

●     Employee benefits can have a big influence upon what you recommend, especially when it comes to income protection.

●     If this person has their own company or is in a position of influence, could business or group protection be the best options for them, even if you don’t advise in these areas yourself.

●     Does this person seem vulnerable to you? Make sure you record it within a Vulnerable Client Register and get support from your compliance oversight.

●     If you have exhausted all of your options and cannot find the right cover for the client, speak to specialist protection advisers to see what they might be able to do. Specialist options do not always mean silly prices or exclusions.

Kathryn Knowles is an award-winning protection adviser and managing director and owner of Cura Financial Services. She founded and hosts the Practical Protection Podcast and recently launched Advice for Advisers, offering training to help advisers better their understanding of protection insurance.