The age-old protection debate has been price versus quality and it’s fair to say most of us will believe it should be quality first and price second.
Having now supported the advice community from both distribution and insurer, there is a question in my mind that goes one step further – should it now be price versus quality versus underwriting philosophy to help determine the right outcome for clients.
From adviser queries, underwriting processes and claims pay-outs I see across the industry, its clear today’s policyholder is often younger in age than before, we are seeing clients with a greater array of occupations, health conditions and lifestyles.
So not that I want to make the protection world more complex but it’s hard to avoid underwriting philosophy needing to be part of the equation, and the protection specialists I speak to would absolutely agree.
- The price conundrum:
Price is often the starting point for advisers and clients, although that is changing.
However, as we know, a lower premium does not always equate to the right policy and more so the starting premium may not always end up being the final premium.
Understanding the clients’ circumstances, lifestyle and medical situation is essential.
Striking a balance between affordability and comprehensive protection is key for clients to understand the value in their policies.
- The importance of quality:
Quality products are the wholly grail for clients.
It provides reliability and reassurance for both adviser and client, moreover, the more robust the product the potential for quicker claims pay out too.
With an ever-growing product range within our industry we are fortunate to have tools that support this decision making and while price will play its part too, there is no better peace of mind than an all-encompassing solution.
- The value of a great underwriting philosophy:
Underwriting philosophy determines how insurers assess risks and set premiums.
A thorough understanding of an insurer’s underwriting approach is crucial.
Some insurers may focus on broad market trends, while others adopt a more personalised, risk-specific strategy.
I have also seen the introduction of future-proofing policies by encompassing newer stances on legacy policies. Ultimately, it can have an impact on price and quality of outcome and therefore underwriting philosophy is a real contender on what advisers need to consider when speaking to a client with potential medical conditions.
- Striking the right balance:
The challenge lies in finding the sweet spot that balances price, quality, and underwriting philosophy.
Policies that align with individual needs and medical history may come at a higher cost, but the long-term benefits often outweigh the initial expense.
Its best practice to ensure that policyholders receive adequate coverage for all their needs but with factors like reviewable exclusions, you can help to mitigate future changes.
While I definitely don’t want to make the industry more complex, I really am seeing underwriting philosophy as a game changer to the way an adviser may be able to support a client.