Archive: Dec 2015

Mortgage Intelligence Protection Insight: Have you considered the value of unpaid work?

Head of Mortgages and Insurance Stephanie Charman highlights the value of unpaid work and how protecting your clients could extend beyond just the breadwinner.

It is easy to assume that financial cover is only needed for those in employment, to ensure loved ones are protected if they are unable to work. But provider Legal and General have challenged that assumption and calculated the ‘value of a parent’, revealing that protection is very much needed for unpaid work parents do at home as well.

This raises the possibility to discuss protecting the non-breadwinner of the household with your clients. After all, if they were unable to do the important unpaid work they do due to long term illness or even death, the breadwinner will most likely need to take time off or pay to cover the necessary chores and look after children.

The real cost of parenting

In a 2015 report, Legal and General found that most people underestimate the value of the unpaid work that they do. When asked to calculate the overall cost of raising a child to the age of 18, parents on average estimated the cost to be £123,365, when in fact it is as much as £184,392. This breaks down to £10,244 a year, or £197 a week. Most people underestimate the sheer number of hours they spend on unpaid work such as chores and childcare.

The value of Mum and Dad

To put things into perspective, Legal and General also calculated the annual salary that the unpaid work equates to for parents in the UK. On average, a mum’s value is £29,535 a year, with the value of a dad coming to £21,601. When asked to estimate this figure, people perceived the “salary” to be £16,796 for mums and £16,120 for dads, some way shy of the actual cost.

Potential client scenarios

Has your client considered what would happen if the non-breadwinner of the household was unable to do the unpaid work? If a couple were to prioritise the breadwinner’s protection, how would they cope if either of them were unable to do the unpaid work for an extended period?

These scenarios are very much worth considering with clients when talking about protection, such as critical illness cover and life insurance. Solutions such as Legal and General’s Family and Personal Income Plan (FPIP) pays out a monthly benefit to deliver the financial support if a policyholder is unable to do any kind of work due to illness or death, whether paid or unpaid.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.


Mortgage Intelligence Protection Insight: Help your clients stay protected and healthy in 2016

Head of Mortgages and Insurance Stephanie Charman takes a look at how policy options such as ‘Vitality Optimiser could change the way clients engage with protection in 2016 using new trends such as wearable technology. Steph also suggests how both appointed representatives and directly authorised advisers could benefit from the added-value and direct consumer interaction protection providers offer their clients.

When it comes to protection, I believe saving your client money whilst increasing the value of their policy could be the key to sales in 2016. But with obesity and other health issues on the increase, your client’s BMI or general health could affect the cost of the policy, leading to loaded premiums and possible affordability concerns.

That’s why saving clients money when buying the policy and then encouraging them to stay healthy during the term itself could also be crucial to protection sales over the next year. I think that one of the providers currently making their mark in this respect is Vitality, especially in combination with Vitality Optimiser: their flagship policy option that rewards consumers for actively engaging with their protection cover.

Staying fit and saving money

Did your clients receive any wearable technology under the tree this Christmas? If they did, they could be taking advantage of the latest benefits offered by policy options such as Vitality Optimiser. By offering rewards and even discounts to consumers if they stay fit and healthy and improve their “Vitality Status”, consumers can now actively engage with their policy, taking control of their own health-tracking using a points system. Reward can be a big incentive for clients, as they look to increase their “Vitality points” and monitor their healthy lifestyle every year.

Globally, wearable technology sales are expected to rise from 17 million in 2013 to 187 million by 2020. Sales are also on the increase in the UK, as we catch up with the engagement of the new trend in the US and China. I think it is inevitable then that more providers will embrace this consumer-focused market that helps clients directly reduce their premiums and increase their health, a win-win situation for provider, consumer and adviser alike.

Increasing client engagement can optimise sales

I understand that income protection faces possibly the strongest customer objections, despite being a vital cover for consumers. Protecting your client’s income is very real, but income protection accounts for less than 1 in 10 protection sales.

Tackling assumptions about state and employer support, as well as the surprisingly affordable cost of income protection, can often be the best start to the conversation. To help you even further, Vitality are offering an additional 5% discount on premiums on income protection policies with Vitality Optimiser, up until 29 January 2016. This means that consumers now have the potential to receive up to a 30% discount with Vitality Optimiser.

I believe that with the upfront discounts offered and the activity-tracking encouraging constant engagement with the brand, advisers will find that clients are also more likely to renew their plan, increasing your sales further.

If you want to find out more, there is a sales aid available to help you explain exactly how Optimiser works with your clients. Alternatively, call our National Protection Sales Manager Bernie Buron on 07764856553 to talk about how you can increase your sales in 2016.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.