How to talk to young clients about the power of protection

The protection gap is getting bigger. The pandemic highlighted the need for everyone to have some level of insurance, yet we still seem to be neglecting those that need it most. Younger clients, those aged between 18 – 40, don’t think they need protection… and that is precisely why they do!

Related topics:  Blogs   |   Emma Vaughan | SimplyBiz
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5th November 2021
Emma Vaughan SimplyBiz
"As an industry, we can quickly start to spread the message and help younger clients understand their needs by using the information that we already have available to us."

Without adequate cover in place, even breaking a leg could have a massive impact on a young client’s ability to pay their monthly bills for things like cars, phones or a social life – and that’s without considering those with mortgages, rent or children to pay for.

The immediate benefit of having the right cover in place means that clients can recover without the additional burden of worrying about money. An income protection policy quickly removes the concern of having little or no sick pay, a critical illness policy could help pay for treatment or care and a life insurance plan would mean that no one had to leave their home if the worst happened.

There are also longer-term benefits to having adequate protection cover too. Having this financial stability will allow clients to recover at their own pace so they are not forced back to work too soon, which could result in complications and future health problems. It also negates the need to take out loans or use credit cards to pay for everyday things, so it doesn’t impact any future borrowing needs. Some clients even choose to pay off some or all their mortgages with their insurance claim and, as more people now survive critical illnesses, it frees up more money in later life.

As an industry, we can quickly start to spread the message and help younger clients understand their needs by using the information that we already have available to us. Claims skyrocketed in 2020 and if we can use a client’s story to help secure another person’s financial future, then we should be telling everyone that will listen! Testimonials and stories from young claimants can help bridge the gap. This key demographic may not have the mortgages, pensions and investments that older clients do, but they will still have outgoings that need to be safeguarded. Claims data is something all insurers will have in abundance, and we need to utilise it to build even further on the claims statistics that are published and share the real-life stories that will help change lives.

Another area we could look at as an industry is the terminology we use. Ask any 18-year-old what protection means to them, and I guarantee income protection is not the first thing that comes to their mind. We can start by calling our products what they actually are. Everyone knows what life insurance is and we have made some headway in understanding around what critical illness cover is but permanent health insurance? Does that do what the name suggests? Language plays a strong part in a sales process, so we need to be using words that clients connect with to understand their pain points and offer them clear solutions through the channels with which they are most likely to engage.

Social media is still massively underutilised in the financial industry, however there are a few firms that are leading the way by using Instagram, Facebook and TikTok. Now I am not suggesting that we all start doing dances to promote protection, but consistency of brand awareness on these platforms has been shown to build trust. Clients have higher engagement when they have a larger number of touchpoints, and this will not only generate new business, but also support the retention of existing clients.

And finally, we need to start recruiting new talent into the industry from a range of backgrounds. Very few set out after school or college to be in the financial industry but, with only 50% going on to higher education, it gives us, as an industry, a great opportunity to start bringing in fresh minds. Not everyone is going to want to further their education in the schooling system, and I use myself as the example here as I had no interest in following the direction of my friends and opted out of university. However, not entering higher education doesn’t mean individuals don’t have the skill or work ethic to work in the protection industry. Some of the best advisers in the country were introduced to their roles later in life, because of their attitudes towards helping people and I believe that if we can recognise that a lot earlier then we can start to create a new wave of younger, more diverse and technologically advanced financial advisers.

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