The Top Five things that aren’t done often enough when reviewing insurance

Obviously, everyone does their reviews differently, but these come from when I worked with mortgage brokers doing calls for insurance sales, with the added experience of some advisers who have been generous enough to share their stories with me:

1. Ask for the client’s insurance file – even if they say ‘oh it’s only a few letters’ insist on them digging them out. It is a powerful, visual, reminder to them of how much of a mess their insurance arrangements are. Then point out a few uncomfortable truths – ‘this would be pretty hard for a person to tackle if there were need to claim…’ which all makes it so much harder for the client to say ‘I don’t need your help’.

2. Check their bank statement – having got numbers of policies from the file, check and see if you can find the payments on the client’s last bank statement. More than half the time you will find that a policy they think is live, but it has no payments being made. You may also find cover that they thought they had replaced and cancelled (“Oh, I thought you cancelled that” says one to the other). Still more evidence that they aren’t managing their cover – plus vital intelligence on exactly how much is currently being spent. Do the decent thing and check if the home, contents, and car insurance are also being paid at the same time. This is also a good place to pause and point out that it amazes you that people insure their cars but don’t insure their incomes…

3. Challenge their basic financial position – so you always review assets and liabilities, income and expenses, but challenge some of these numbers. Challenge with a special emphasis on the questions affecting resilience: how much cash do you have at hand? Are you fully extended from a borrowing point of view? How long would your savings last if you were unable to work? Are you saving each month? These inform all sorts of issues such as whether an emergency fund is available, the size of cover required, excess levels and waiting periods to apply, and the need for income protection.