What to consider when choosing a protection policy

When choosing a protection policy it can be easy for consumers to fall into the trap of basing the decision on price alone - but this can prove costly. To improve their chances of finding a provider that will pay out should the worst happen, we have compiled a list of five questions that people need to ask.

1. How many claims do they pay?
The percentage of claims paid in the past is arguably the most important factor when it comes to buying protection. A provider may offer a seemingly great product that covers lots of conditions for a low premium, but how can you have confidence they will be there in a client's time of need. Those who pay out a high percentage are not only showing evidence that their clients understand exactly what they bought and what scenario allows them to make a claim, but also that they have a thorough disclosure procedure which asks the right questions at the time of application.

2. What treatment can your clients expect?
Being forced to make a claim is going to be a traumatic period in a person's life so they need to be sure that their provider will deal with them in a slick, sensitive manner that does not add to their distress. Does the provider offer any extra support, such as a telephone advisory service for clients to discuss their medical conditions? These may seem unnecessary when a person is taking out a policy but can end up being a vital part of the overall package. Look for evidence of how they have treated policyholders in the past. After all, the purpose of taking out such a policy is being able to rest easy knowing that they will do everything to ease a client's suffering should the worst happen.

“if the process of buying protection goes well it will relect gloriously on the IFA”

3. How flexible is the policy chosen?
Will this company meet an individual's protection needs? Does it offer the flexibility to have varying amounts of Critical Illness, Income Protection and Life cover in one package or will they have to take out individual policies? The ideal scenario is to have a bespoke solution that meets their requirements rather than being shoehorned into a product that is fairly limited in terms of coverage. The conditions covered are also important. Applicants will need to look carefully at the definitions of the illnesses on which it will – and will not – pay out. It can also be an error to automatically opt for those covering the longest list of conditions as some of these may be so rare as to make their inclusion effectively pointless.

4. What levels of service can be expected?
Customers need to be sure the application process will progress smoothly and that the provider can be trusted to deliver a trouble-free service, such as taking premiums regularly without any hassles. They also need to have confidence that the company will assess their medical information effectively and quickly, with any examinations required being sorted without unnecessary delays. Some companies will email back to their clients details of the information submitted in order for any mistakes or omissions to be rectified. This can save a lot of potential problems further down the line.

5. How much is it going to cost?
If providers tick the first four boxes then you can compare prices. If the cost is too much then an individual may decide to take a chance by going for one that demands a cheaper premium and accepting the policy may not come with as many benefits. However, in most cases there is little to choose between most providers as far as cost is concerned but a lot of difference between what they offer to prospective clients.

Conclusion
Spending time choosing the right provider makes sense for the adviser and the client, points out Kevin Stevens, head of sales at Bright Grey. "The commercial reality is that if the process of buying protection goes well then it will reflect gloriously on the IFA - but dreadfully if the whole experience is fraught with problems."