Legal & General Mortgage Club has revealed that over a third (34%) of consumers who purchased their mortgage direct from a lender have absolutely no protection policy in place, such as Life Insurance, Critical Illness Cover or Income Protection.
The research, which included a survey of over 2,000 UK homeowners, highlighted that many consumers are stepping onto and up the housing ladder without having a safety net in place should a long-term sickness, critical illness or death of a loved one render them unable to meet monthly repayments on their mortgage.
Latest statistics released by the Bank of England and the Financial Conduct Authority (FCA) have shown that 2019 Q1 has seen an increase in mortgage lending activity when compared with the previous year. New lending that lenders have agreed to advance in coming months are 4.5% higher than a year earlier – approximately 16 million UK adults have a residential mortgage.
The Legal & General research found that mortgage advisors were championing protection in their conversations with borrowers who had taken their advice and more than three in every five (62%) customers who had used a mortgage adviser had been recommended Life Insurance. Nevertheless, it is still widely acknowledged that many homeowners have inadequate protection.
Possibly, because the idea of selling additional insurance products seems to arouse a complicated range of emotions for mortgage advisors.
Last year, the Association of Mortgage Intermediaries (AMI) hosted a meeting for members of the Financial Services Consumer Panel (FSCP) to meet senior representatives of the mortgage intermediary market. All those the FSCP spoke to had, voluntarily, included a requirement to discuss protection products with mortgage customers within their internal processes as they felt that they were essential and in the best interests of the customers. They had instigated discussions about how customers would cope in the event of the death or serious illness of a wage earner, especially when making such a large commitment such as a mortgage. However, due to lack of time, specialist knowledge or the burden of additional admin, it’s likely that these vital conversations would often end at a recommendation, with no protection cover being purchased by the borrower.
Here at Essential Insurance, we offer a partnership referral service to mortgage intermediaries who are having the important conversations but want to go beyond recommendation and feel that they’d rather let a protection specialist deal directly with the customer when it comes to this type of insurance.
If you’re a mortgage intermediary and you believe that you have a duty of care to protect families, you’ll almost certainly acknowledge that selling protection insurance during or after a lengthy meeting with a client about their mortgage requires practice and patience – but the great news is it doesn’t have to.
A partnership with a life insurance expert such as Essential Insurance is a viable way to achieve outstanding outcomes for your customers and circumnavigate the complexity; a specialist will unravel the intricacy and offer a practical solution to the challenges that you may face when selling protection insurance – plus a worthwhile partnership will generate you an healthy income, without you having to invest any of your time.
A business such as ours, specialists that deal with protection insurance day in day out, could fill in the gaps in terms of product knowledge, ensure products offered are consistent with your client’s specific demands and needs, expertly complete all the legally required paperwork and we’ll pay you for the introduction!
If you think a partnership could work for your business, contact Rob White, email@example.com or leave your details here and we’ll contact you to arrange a meeting.