Advisers should ask customers about the risks associated with them not being able to meet mortgage payments, rather than reeling off the benefits of income protection cover to them.
The panel on the second day of the Income Protection Task Force’s (IPTF) Income Protection Awareness Week noted this created a greater impact by allowing customers to understand and visualise their specific risks.
Angela Davidson, head of protection at Mortgage Intelligence, explained it was important customers “paint their own pictures”.
“Years ago, when I was trained as an adviser, I was told tell them this, tell them that and you paint the picture for them,” Davidson (pictured) said.
“But actually, it isn’t about that. You ask them to tell you what it is you feel like now? What is you want to see? And that’s a totally different ball game,” she added.
This was echoed by Andy Walton, protection proposition director at Mortgage Advice Bureau (MAB), who revealed the firm does not tell customers what the risks associated with not keeping up with mortgage payments are.
“We ask the customer what the risks are,” Walton said.
“We’ve found that it’s very hard for mortgage providers to do this because they prefer to tell the customer what the risks are. You need to consider what happens if you die or become ill or whatever.
“But it’s much better we’ve found to ask the customer that question so our advice to our advisers is to say to the customer, here’s your mortgage. This is what it looks like. And do you remember we said that you need to keep up the repayments on the mortgage and we’re setting this up for a 30-year term?
“So, my question Mr and Mrs Customer is simply this – is there anything at all that can stop you keeping up the repayments on this mortgage over 30 years? and then I just shut up.
“Then they look at each other and they start thinking and they say things like I could lose my job. Yes, I’m going to write that down. Is there anything else that can happen? And then they will come up with other things.”
Walton added that while customers will not use industry terms like deferred period or critical illness, they may suggest that they could fall off a ladder or get cancer.
“They are giving you everything in their language. Once you’ve got that list from the customer and believe me you can – in 95% of cases with a bit of nudging they’ll give you these things.”