I wonder how many client conversations come to an impasse when the subject of their existing cover is discussed. All too frequently, we find clients have little knowledge of their employment benefit package.
Death in service, critical illness cover and sick pay benefit periods may have been discussed during the recruitment process and will be documented alongside their contract of employment but, as we all know, memory fades over time.
The lack of ready access to this information results in the call ending with the client agreeing to try to find a copy of their employment contract or to contact their HR department. The time delay breaks the momentum of the conversation and too often results in the discussion not progressing.
Maybe this is one reason income protection penetration rates are relatively low and why life and critical illness cover advice becomes the default setting. A bird in the hand and all that. Providing clients with appropriate income protection advice means understanding the full picture. How much sick pay would they receive if they were unable to work and, crucially, how long would they receive it for?
For some time now, the Protection Distributors Group has encouraged providers to produce annual statements for customers for several good reasons:
- Annual statements help to increase consumer confidence in the products they are paying good money for every month.
- Clients and their families are in a better position to make valid claims and know who to contact.
- They provide a powerful vehicle to remind clients about the value of putting their policy into a trust.
- They act as a useful reminder that their cover is still relevant to their current situation.
- Customers can also be reminded about additional benefits that come with the package. Fantastic services such as Best Doctors, Helping Hand and remote GPs add real value and support for policyholders and their families. If people are not reminded about these benefits, they forget they have them.
- If their situation has changed since taking out the cover, it can prompt the customer to contact their adviser.
- Reduce lapse rates.
We would also like to see employers providing their staff with statements to show their sick pay and other benefits, so they can clearly see what they have and do not have. We welcome the recent Association of British Insurers initiative to drive this forward.
Too many people overestimate the level of benefit entitlements from both employer and state, or forget what insurance they have in place.
By improving consumer awareness of what is available, we will help more people to understand the value of protection and ultimately help more of them to claim.
David Mead is a member of the Protection Distribution Group and chief executive of Future Proof