How to talk to clients about death

Clients are reluctant to talk about how serious illness or a death in the family could affect their finances. Advisers can play a role in changing this mindset. Louise Colley, head of protection sales and marketing at Aviva, explains how…

The beginning of the new year is a great time to renew contact with clients and remind them of the products and services suitable for their situations.

With this in mind, we recently asked consumers what they believe are the most important financial steps they could make in 2012. The standout areas people said were: to cut back on spending as much as possible, to pay off their debts, and to review all their finances to ensure they are getting the best deals possible.

More people are preparing to plan for their holiday and check their energy supplier is offering competitive prices than are planning to buy life insurance.

This would be fine if most families already had a life insurance policy in place, but the research reported just 40% of families say they already have an existing policy. And in addition, just 13% say they have critical illness cover, and just 10% say they have an income protection policy.

With an estimated 84% of the UK population living as part of a family, three quarters of whom have one child or more, and two thirds of whom own their own home (either with a mortgage or outright), these figures are worryingly low.

That they are so low is even more confusing as a fifth say they worry about the possibility that either they, their partner or their children will contract a serious illness in the next six months, and a quarter are worried it could happen within the next five years.

Disconnect

So why is there such a disconnect between the level of concern about serious illness and mortality and the low number of protection policies in place? The research showed just how uncomfortable people feel discussing their personal circumstances and how it could affect their finances. It found more than a quarter admitted to being uncomfortable discussing their debts and borrowing with their wider family, and 14% would be uncomfortable discussing the topic of their will.

This represents both a challenge and an opportunity for advisers. If people are uncomfortable discussing the financial implications of serious illness or worse for a member of their family, with their family, then what hope do advisers have? But it is precisely this reason that talking to a adviser could be of real value.