Over the years, protection would often be a one-off transaction, with limited interaction after the sale.
With terms of 30-odd years and sometimes lukewarm clients, is it any wonder?
But there is a growing trend – among both advisers and clients – of regularly reviewing and changing protection arrangements: Do you have the right level of cover? Can you afford more? Should you have less? How is the new job?
In this way, slowly, protection is adopting some of the disciplines of wealth planning.
So providers need to be able to deal with the flexibility this fresh approach demands.
There are a number of reasons why protection policies are rarely tweaked, and among them is the ability of the provider, and product, to change. If an existing protection policy cannot change and the only option is to open a new one entirely – it will happen less frequently.
But with advisers discussing clients’ protection provisions more often, it makes sense for them to be able to make changes quickly and easily if they are needed.
Peter Hamilton, Head of Market Management at Zurich, said the provider has built a protection system that can “change and grow” with clients, as their needs and circumstances do.
“We’ve made it so that there is a whole lot an adviser can change throughout the life of the policy” he said. “I’ve been involved with what we call ‘adaptable’ life plans before, and they weren’t particularly adaptable at all, but with this there are genuinely lots of things you can change.
“More advisers are doing this: they are seeing protection as something that isn’t just a one-off transactional sale, but something that should be able to reflect clients’ needs as they change.
“You know: Does the policy still meet their needs; is it the right level of cover; can they afford more, do they need to have less? Most plans just can’t deal with that.”
An example of Zurich’s new flexibility, Peter said, is children’s cover. As this has become more common as an extra within mainstream critical illness, some clients, perhaps who do not have children or whose children have grown up, may be paying unnecessarily for the benefit.
Though he said it may represent only a small proportion of the premium, it may not always be needed, and the ability to switch it off – and on again, if necessary – should be possible.
“We introduced children’s cover on critical illness some years ago, and though we don’t like to think of children being unwell, [this cover] can make a big difference in terms of parents’ ability to cope. Not least because sometimes they may need to take time off work to look after their child.
“But, of course, if you’ve never had children or your children are too old [for children’s cover], why would you pay for a benefit you can’t claim on?
“So one of the things we’ve done is strip out the cost of that and, importantly, if you want to add it subsequently, if your circumstances change, you can do.”
Peter said this represented one example of wider changes Zurich had made to make advisers’ – and clients’ – lives easier.
Others include the introduction of customer-keyed underwriting, the use of electronic signatures, and the offering of alternative terms for declined and rated cases, among others.
“So what we’ve built is really good cover, that’s easy to buy, easy to service and, most importantly, easy to change.
“So it’s comprehensive cover that can grow or indeed shrink with you, really.”
To find out more about Zurich’s new protection system, visit www.zurichintermediary.co.uk/protection
This information was first published and correct as of September 2018
2018z FP186 300919