What to do when clients say ‘no’ to life cover

Life cover is often seen as easier for advisers to sell than income protection and critical illness cover. As it is relatively simple, people get it – if they die during the policy term, life cover ‘does what it says on the tin’ in providing a payout to loved ones.

Premiums are also cheaper than other types of protection products, making it more affordable to people on tighter budgets. However, this does not mean everyone who needs life cover has it or wants it.

Advisers may come across clients who just don’t want to know about it for all sorts of reasons. They may think it’s unnecessary because they are young and healthy.

They could think it would cost too much, prioritise spending on other things or are happy to simply bury their head in the sand when it comes to thinking about dying before their partner or their children losing a parent.

Some might assume their families would be fine if the unthinkable happened because of savings, cover through work and/or state benefits.

But assumptions are no substitute for setting up a life policy to pay off a mortgage, pay the bills and ensure grieving families do not have to worry about money.

So, how do advisers get resistant clients to see the bigger picture?

Trust

To combat objections to life cover, advisers need clients to trust them and believe in what the adviser is telling them. You don’t have to go far online to see the seeds of mistrust in financial services are fuelled by misinformation or bad experiences being generalised across the whole industry.

Beliefs like insurers never paying out insurance claims or advisers only recommending life cover to get their commission are way off the mark. But people who haven’t been in contact with a regulated adviser or who have never made an insurance claim may not know any different.

Protection advisers can make a difference in this respect through social media posts to help people understand what can seem daunting and confusing. They will then have someone they can relate to and reach out to if they want protection advice.

 “We’re on TikTok and have quite a lot of followers on Instagram. We have built that over the last four and a half years, with lots of educational content,” says Cover My Bubble founder Emma Astley.

When new clients come on board after seeing Cover My Bubble on social media, Astley says they know what they’re coming for and the kind of company they’re dealing with.

“We don’t get many objections because of our process,” says Astley. “We ask the right questions to know whether we can cover them, and I don’t believe in arranging policies on the first call.”

Death-in-service benefit

The Protection Parent director Karla Edwards doesn’t think she has ever had a client object to life cover. However, she points out that, if a client has death-in-service benefit through work, they might think they don’t need it.

Death-in-service benefit is similar to life cover but, because it is set up by employers, the insured person has less control than they have over an individual life policy. Payouts from death-in-service are based on a multiple of an employee’s salary, which may not necessarily meet their family’s needs. In contrast, individual life policies are set up with the client’s personal circumstances and family’s needs in mind.

“If a client has death-in-service through work, we will have a conversation about it and look closer at it,” says Astley. “Sometimes it is discretionary, meaning people might not receive their full salary.”

Death-in-service benefit can take up to 12 months to pay out for some families.

“But life insurance can pay out much quicker and to the right person who has been nominated on the trust documents we’ll arrange for clients,” says Astley.

“Death-in-service can then help with additional financial needs and help replace the loss of income from a partner into the house.” 

Edwards adds that clients will lose their death-in-service benefit if they leave their employer.

“People don’t stay with a company forever,” she says. “And if they do change to a job which doesn’t have death-in-service benefit, life insurance might then be more expensive.”

This is because life cover is cheaper when people are young, healthy and less likely to claim. Premiums rise with age, as people often have more health problems the older they get.

Additional benefits

For some people, life cover may feel like an unnecessary expense or something they will get around to doing at some point – just not now.

“People should have it but those on a budget can put it off because they think it’s most likely not going to happen,” says Edwards.

Advisers can handle objections like these by ensuring people understand the potential impact of delaying the decision to get cover and creating awareness of any additional benefits or value-added services insurers are offering alongside it.

Edwards highlights Aviva’s Global Treatment and Zurich’s Accelerate as examples of worthwhile extras on life cover that can prompt clients to become more engaged in discussions with their protection adviser – and which may help them recover from something like cancer.

“Clients need to speak to their adviser because they can only get this through advisers, which gives us a head start,” she says.