BROKERS and insurance experts have revealed some of the most bizarre reasons their clients have given them for not needing life insurance and other important policies, such as critical illness and income protection.
They range from being vegan, doing yoga and, in one case, a medium saying they have seen the person in question fit and healthy in their 80s.
The protection conversation will often take place somewhere between the mortgage application and completion, typically at the offer stage, say brokers.
But despite having committed to a sizeable monthly mortgage payment and having a large debt to cover in the event of illness, injury or death, many people give excuses that are inexplicable — and, in some cases even, metaphysical.
80th Birthday
Scott Taylor-Barr, Principal Adviser at Leicester-based Barnsdale Financial Management, shared a textbook example of the latter.
He explained how he was sitting in a client’s house, having recommended her the right mortgage for her needs and had then moved the conversation on to discussing the risks that this mortgage brings to her life.
The response given to Scott was a curveball to say the least: “My medium has seen a vision of me celebrating my 80th birthday fit and well, so I know I don’t need protection.”
Scott says: “I was certainly caught off-guard. The funniest part was me having to call my T&C (Training & Competence) Supervisor to warn him that the Suitability Report I was about to issue said the above as her reason for not accepting any protection advice. I’m pretty sure he checked his calendar to make sure it wasn’t the 1st of April.”
Jinxed
Ben Perks, Managing Director at Stourbridge-based Orchard Financial Advisers, shared an anecdote of his own: “I had a mother talk her son and his partner out of Critical Illness Cover because she thought it would jinx them and they’d get a critical illness. I challenged this viewpoint but ultimately ‘Momma knows best’ and they went on without it.”
Charles Hart, Business Principal at Milton Keynes-based LionHart Mortgages & Protection, has also seen his fair share of random reasons for not needing insurance despite the fact that, subject to age and health, the monthly premiums can be very small.
Charles says he has seen it all: “Some that stand out are “I’m Vegan, so I don’t get ill”, “I do yoga regularly” and, the time-honoured classic, “It won’t happen to me”, which in this instance was said by a builder whose colleague had been hit by a forklift truck the week before.”
Education is key
Nouran Moustafa, Practice Principal & IFA at Roxton Wealth, says she has been given endless daft excuses over the years, but that in many cases the timing and the way protection is raised play a part.
She continued: “Most people do not avoid protection because they are irrational, they avoid it because they have not been educated on it properly, because it is introduced at the wrong time or it is sold to them badly.
“If someone has come in focused on getting their mortgage over the line, their head is already full, so trying to load a big protection pitch on top of that can switch them off immediately.
“The most common problem is not that people do not care, it is that they do not yet understand the value of protecting the income, health or life that everything else depends on.”
Bottle of red
Now all good brokers will stress the importance of people being honest about their lifestyle when they apply for insurance, as to do otherwise would potentially invalidate it, but they do warn that medical science will often clash with cultural myth.
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said: “I once had a client who took the advice of his doctor that a drop of red wine was good for him, and on his medical questionnaire declared he drank a bottle of red a day. Strangely the insurers were not quite as keen on the medicinal benefits of alcohol and rated his premiums three times the standard price.”
Michelle Lawson, Director at Fareham-based Lawson Financial, says: “Too many people think they are invincible. They say it won’t happen to them, their mate down the pub doesn’t have it, their parents have said we will be fine, they will ask their friends and family for support or, worse still, ‘I will just set up a GoFundMe page’.
“People need to take responsibility themselves and realise things do happen. Our hospitals are at breaking point, which tells you everything you need to know about why protection is key.”
Fit and healthy
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, says “the classic reason people often give is that they are fit and healthy so why would they need insurance”.
She adds that people’s logic is often full of holes: “Only yesterday I asked someone why they insure their dog, and they said because the vet bills are so expensive, and didn’t understand the irony. Unfortunately, we are in an era when people leave their problems to others to sort out, whether that’s their parents, their children or GoFundMe.”
