Protection Insight - Issue 3


The Insurance Distribution Directive (IDD) requires you to obtain specific information about your clients’ insurance demands and needs and to map these to products on offer. This means you have to carry out a robust analysis of what’s available so you can be confident your recommendation is in line with your clients’ requirements. I wrote previously about the requirements introduced by the IDD. Here I’ll talk more about the customer demands and needs requirement and key points to consider when making a protection recommendation. Tailoring a protection plan At Royal London, we understand that all your clients are unique. You need protection solutions that are flexible and aren’t ‘one size fits all.’ When carrying out your product research and determining a shortlist, you’ll want to make sure the product options available give your clients choice. Let’s start with risk. The biggest risk your clients face during their working life is being off work due to illness or injury. Using the risk summary report from our marketing studio, I established that I have a 23% chance of being off work for two months or more in my working life, yet only an 11% chance of getting a critical illness, and a thankfully much smaller 3% chance of dying 1 . But life cover and critical illness sales outstrip income protection by some margin. Of course income protection might not be appropriate for every client, but running this simple report is a great way to encourage them to think about their needs. If they’ve just taken out a big mortgage, the natural instinct is to protect that large debt in case they die. But what if they couldn’t work? How would they pay their mortgage and other outgoings each month? That’s where income protection can help, though you’ll need to factor in employer sick pay arrangements and any other benefits they might be entitled to. Mapping your recommendations to your clients’ needs

Made with FlippingBook - professional solution for displaying marketing and sales documents online