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Financial Mortgage Advisers | Expert Mortgage Brokers

Financial Mortgage Advisers

Financial Mortgage Advisers


As Connect Mortgage Network, we recognise the vital role insurance plays in safeguarding the financial well-being of individuals and their families. However, it’s crucial to acknowledge that many clients may have misconceptions about insurance. 

This article explores common misconceptions supported by recent surveys and reports. We aim to help financial mortgage advisers guide their clients effectively.

Insurance serves as a crucial safety net in today’s fast-changing economic landscape. Unexpected events can significantly impact financial stability. Misconceptions about insurance can leave individuals at risk.

Our goal is to highlight the importance of protection policies. We aim to dispel myths that may prevent clients from making informed financial decisions.

Clients may have concerns about insurance due to affordability, policy details, or doubts about its necessity. Providing context for protection costs helps financial mortgage advisers demonstrate affordability. Clients may not be fully aware of this otherwise.

We address clients’ concerns and provide factual information to ensure they understand the various insurance options available. This knowledge empowers them to make informed decisions that can secure their financial well-being and that of their loved ones.

In doing so, we aim to strengthen the financial resilience of individuals and families.

Misconception 1: They don’t need insurance

Many young, single, mortgage-free individuals believe that insurance is unnecessary. They often ask, what is there to protect? However, life circumstances can change rapidly. A new partner, marriage, a home purchase, or starting a family can bring significant responsibilities. Reminding clients that insurance is more affordable when young and healthy is essential.

Locking in lower premiums early provides invaluable protection as they age. Stay-at-home parents often overlook their insurance needs, assuming they aren’t primary earners. However, if they pass away, the surviving spouse may face financial strain due to childcare costs. Insurance can bridge this gap and ensure financial stability.

Clients relying solely on death-in-service benefits from their employer should consider the limitations of this coverage. If they change jobs, this protection may disappear. An individual policy offers consistency and ensures coverage, regardless of employment changes.

It’s also worth clarifying that insurance isn’t just about posthumous payouts. Critical illness cover and income protection are valuable components that provide financial support in times of illness or injury. For all these reasons, seeking the advice of financial mortgage advisers is crucial.

Misconception 2: Insurance companies don’t pay out

The misconception that insurance providers routinely deny claims can deter potential policyholders. However, recent data from the Association of British Insurers (ABI) reveals a reassuring reality. According to the most recent data released by the ABI, individuals and families dealing with bereavement, illness, and injury received substantial support in 2022. The figures reveal that a total of £6.85 billion was paid out by protection insurers, encompassing both group and individual protection policies during that year. 

The 2% of claims not paid were primarily due to non-disclosure of medical information or conditions not covered by the policy.

Clients must understand that valid claims will be honoured if their policy remains active and accurate information is provided during the application. This is an excellent opportunity for advisers to stress the importance of seeking expert advice when selecting insurance coverage. Advisers can guide clients through the application process, ensuring clarity and accuracy.

Misconception 3: Insurance Is too expensive

Perceived high costs often dissuade individuals from obtaining insurance. It’s essential to emphasise that several factors influence insurance premiums, including age, health, medical conditions, lifestyle choices, etc. Clients must understand that their individual profile significantly impacts premium rates. This awareness may inspire positive lifestyle changes, such as quitting smoking or adopting a healthier lifestyle.

Moreover, insurance is relatively affordable, with policies available for as little as £5 per month. When clients realise the potential consequences of being underinsured, the value of protection policies becomes more apparent.

How do I talk to my clients about life insurance?

Financial mortgage advisers discussing life insurance with their clients can feel discomfort. People often avoid conversations about mortality, even though these discussions can ultimately benefit their families.  Understanding that your client is protecting their most cherished treasure, their family will offer a sense of security.  

This clearly illustrates how our discussion on building client rapport, which we covered in “Client Rapport | Valuable Strategies for Mortgage & Protection Advisers,” will be beneficial.

In the meantime, when introducing protection insurance, financial mortgage advisers must delicately broach the topic of life’s inevitable conclusion and the potential impact on their loved ones without financial security. 

The challenging paradox is that even experienced protection financial mortgage advisers must establish trust. Your clients should find comfort in the tone of your voice and the language you employ to put them at ease, making it easier for them to pay attention to your advice on a topic they may initially be hesitant to address.

It’s essential that, after the conversation, they leave with the belief that they’ve made one of the most beneficial decisions in a long time and that your utmost priority is to assist them in reaching their financial objectives while ensuring their security in the worst-case scenario.

Why should financial mortgage advisers introduce protection to their clients?

Aside from the FCA, which expects Consumer Duty to be a top priority for mortgage and protection advisers, financial mortgage advisers who have yet to enter the protection market overlook a valuable chance to enhance the depth of their customer relationships. This counts towards establishing a good rapport with their clients. 

Advisers proficient in addressing and providing tailored protection coverage to meet their customers’ requirements will cultivate more enduring and financially rewarding relationships with their clients.  

They bear a moral responsibility to guarantee that customers are safeguarded during the worst-case scenario, especially when taking on the most substantial debt.

Interestingly, in 2021, findings from the Association of Mortgage Intermediaries (AMI) indicate that numerous consumers need a more comprehensive grasp of the various protection products they might require. Forward today,  2 in 5 (40%) advisers say their firm has seen an increase in protection conversations with customers as a result of the FCA’s Consumer Duty, reveals the Association of Mortgage Intermediaries (AMI), ahead of its fourth annual AMI Protection Viewpoint Report on protection within the mortgage industry.

The benefits of protection policies

It’s time for a fresh perspective. Comprehending perspectives and addressing misconceptions is crucial for safeguarding financial mortgage adviser clients.

Consumer Duty enables the financial industry to ensure mortgage advisers prioritise their customers’ needs.

The key message highlights the importance of placing protection at the core of advisory discussions. This is vital when considering mortgages, as exploring available products can impact clients’ long-term financial well-being.

Financial mortgage advisers should be aware of various products, including:

Life Insurance: It provides financial support to the client’s family. It can pay off a mortgage, cover funeral expenses, clear debts, or provide an inheritance.

Over-50s Life Insurance: Designed for older clients, it covers funeral costs and leaves a gift for family members. It offers competitive pricing without requiring medical questions during the application.

Critical Illness Cover: A critical illness payout helps cover living expenses when clients are too ill to work. It also helps adjust their homes for comfort. Coupled with life insurance, it offers comprehensive protection.

Income Protection: Self-employed clients should consider income protection. It ensures a regular income during illness or injury, preventing the need for savings.

We hope this article has provided insights into addressing common insurance misconceptions. Our goal is not to scare clients into buying protection policies. Instead, we aim to initiate an open and honest discussion about life and health realities with their financial mortgage advisers. This approach empowers advisers to guide clients in protecting what matters most: their financial future and their loved ones’ well-being.

Suppose there are financial mortgage advisers who have yet to find a suitable mortgage network or seek a fresh start. We welcome the opportunity to discuss how our community may be the right fit for them.

Please click here to access additional articles explaining the reasons for joining our network.