View more on these topics

The protection budget – better protection conversations

Vincent O’Connor, Senior Business Development Manager, Royal London

Part five of our ‘Five top tips for better protection conversations’ series – agreeing the protection budget.

I’ve already talked about a typical mortgage client in terms of their enthusiasm level when you first meet them. If they’re a first time buyer or moving house, enthusiasm will be sky high because they know that the prize at the end of this journey is a home – somewhere to bring up their children and live their lives.

But at the same time, they rarely would have thought about something terrible happening such as a premature death, cancer or some other serious illness. So the enthusiasm level towards buying insurance will be low.

That’s the balancing act mortgage and protection advisers have to deal with and it’s not easy. The objective is to secure the most appropriate mortgage to buy the home, but also to make sure your clients can keep it should the worst happen.

We know this is a real problem because we see claims statistics every year. That’s why providing mortgage advice and protection advice makes sense and goes hand in hand.

Tie the budgets together

During the mortgage process, ask your client for a budget range.   A total amount for how much they can afford. Ask them what their ideal budget would be. Then ask them what their maximum total budget would be.

Here, you can use an assumptive style question.

“So, your ideal budget would be X, but what would be the maximum amount you would be happy to spend?”

The assumption is that there would be a ceiling to how much money they would be prepared to spend and could afford. Within this range, you can then get to work on sourcing the most suitable mortgage product, but also build in some mortgage protection solutions because those are easy to identify and relate directly to the amount of the mortgage. And you can build this package all within the budget the client told you they would be happy with and can afford.

The difficulty sometimes for mortgage and protection advisers is that what you want to try and avoid is another payment shock in a few weeks’ time, which will come when you start talking about the cost of protection on top of the mortgage.

So it makes a lot of sense to tie the two budgets together and work towards providing a package of recommendations, which get them the house but allow them to keep it should the worst happen.


Current multi asset positioning

Nersen Pillay, Investment Director within Royal London Asset Management’s multi asset team provides an update on the latest positioning of the Royal London Global Multi Asset Portfolios (GMAPs). Read the blog Past performance is no guide to the future. The value of investments and the income from them is not guaranteed and may go down […]

Bank of England keeps base rate at 0.75%

The Bank of England’s monetary policy committee has voted unanimously to keep the base rate at 0.75 per cent. The rate has stayed at this level since it was raised from 0.50 per cent in early August last year. Minutes show that the committee sees downside risks to growth as having increased in the face of […]

Life with type 1 diabetes

By Gregor Sked, Marketing Consultant, Royal London I can still remember the day the doctor told me, “you’ve got type 1 diabetes and it’ll be with you for the rest of your life”. When I turned 18 I expected the months that followed to be filled with the stress of exams, what was I going to […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm