Value added benefits (VAB) provide consumers significant financial value, that can potentially exceed £50,000 over 25 years if actively used, according to Mark Toms, national account manager at HSBC Life.
“Demonstrating to customers you’ve potentially got £50, 000 worth of health and wellbeing benefits brings a tangibility to that and a value statement that they’re actually going to be able to look at and think’ I like that -’ that’s adding real value.”
Toms (pictured) was giving a presentation on driving protection product value through increasing take-up of added services at Health & Protection’s Protection Forum, sponsored by HSBC Life and Underwrite Me at the Ham Yard Hotel in London earlier today.
Toms noted that the younger generations seek immediate benefits from their purchases and unlike older generations are not willing to just buy an insurance product with the hope of never having to use it.
“Generation X – we buy insurance because our parents told us insurance was important,” Toms said.
“Whereas – huge generalisations here – younger generations such as Millennials and Generation Z – they’re tending to buy based upon what they can use straight away.
“It’s an immediate value statement that is very, very important to them.”
He said that overall, VABs are very much valued by the customer.
Great benefit to advisers
But Toms also noted that VABs are also of great benefit to advisers as well.
Toms said: “VABs are also of very much value to advisers and brokers, as its an excellent client retention tool.
“If your customer uses the 24/7, 365 days of the year GP service, they really highly value to get an appointment with a GP.
“The last thing they want to do is to get rid of that policy that provides them access to that.
“So that’s a good client retention tool.”
But the advantages go further than that.
“Equally its a good recommendation tool – so that customer will say to their friends ‘Actually my broker who provided me with this policy, provided me with access to these services that I really love’.”
He added that there are also Consumer Duty considerations in terms of customer value and immediate customer benefit.
And additionally it is “a great reason to revisit the customer on a regular basis.”
Toms said it gives advisers the opportunity to ring up the customer a week after the policy goes into effect to say ‘Have you signed up to the health and wellbeing app?”
Direction of travel
But he also noted that the direction of travel for health and wellbeing benefits could be that they will be charged for in the future.
“We’ve already seen that with some companies starting to charge for their accelerate scheme.
“I think that probably is the direction of travel with health and wellbeing schemes, that they will actually become a separate part of the policy once they are valuable enough to be able to charge for them.”
