Advisers Critical in Shortening Life Insurance Purchase Times
In a recent blog post for IFA Magazine, Ahmed Bawa, CEO of Rosemount Financial Solutions, highlighted the crucial role financial advisers play in helping clients overcome procrastination and prioritize life insurance. Bawa emphasized that guiding clients and addressing their hesitation at the point of recommendation are key to ensuring people secure the protection they need.
“I’ll do that later.” This is a phrase everyone uses for tasks that don’t feel urgent. However, delaying decisions, particularly regarding financial protection, can be costly. A study from the Post Office revealed that many Britons take an extended time to purchase life insurance after recognizing their need.
On average, it takes over ten months for individuals in the UK to buy a life insurance policy after first considering it. Some people take even longer, with over a third taking up to two years to finalize their purchase. This delay stems from various factors. The study found that some are overwhelmed by the sheer volume of life admin tasks, while others are unconvinced they need the policy or see it as a priority.
The Advisor’s Role in Overcoming Procrastination
These reasons for delaying protection will be familiar to many financial advisors. Clients may not believe they need insurance or prefer to postpone the decision. This is where the advisor’s role becomes vital. Advisors educate clients, ensuring that they understand that protection policies are not merely desirable; they are essential for financial security.
Advisers are uniquely positioned to shorten the time between recognizing the need for protection and taking action. This involves consistently and clearly presenting the case for these products.
The worst-case scenario is a client realizing they need protection but delaying too long in securing it, leaving themselves and their family exposed. By keeping protection options at the forefront, financial advisors can significantly reduce the likelihood of this happening.
Addressing Advisor Discomfort and Promoting Protection
Another factor that can contribute to the prolonged process of acquiring protection products is adviser awkwardness. Helping a client to complete the process for life insurance or income protection can be more challenging than for other products, such as mortgages. Clients often come to an advisor seeking a mortgage, but rarely do clients proactively seek protection.
This requires advisors to adopt a sales approach, which demands a different skillset and attitude that not all advisors feel comfortable with. Overcoming this discomfort is crucial, especially given the Consumer Duty regulations, which require advisors to adequately cover protection options.
Rosemount Financial Solutions has worked extensively to address this issue, offering workshops and other resources to improve advisors’ grasp of protection products and how to promote them effectively. They have also established a Google group for peer advice on complex cases and more experienced protection advisors, which aids advisors in developing the ability to present protection options constructively.
Taking Action to Reduce Delays
There is no single solution to overcoming advisor discomfort around ‘selling’ protection. However, the lack of natural ease for advisors in this area should encourage more action, not less. Supporting advisors should focus on advocating for protection and offering sufficient training, guidance, and help to those who recognize the importance of these products but struggle to make the case to their clients. This will result in more clients receiving and securing the protection they and their families need.
