CHRISISM #77 - Grudge Purchase vs Fantastic Opportunity

23 October 2018

How often have you experienced the onerous burden of the negative perception of this thing called ‘insurance’? So how would you like to be able to create a paradigm shift in the way your clients view their personal protection package, so that instead of viewing it as a grudge purchase they came to view it as a fantastic opportunity? Well, in order to do this, I will first of all have to create a paradigm shift in the way you view your clients’ personal protection package.

You may well have noticed in previous “Chrisisms” how often I refer to the importance of the perception you are creating in the minds of your clients, because perception is reality in the mind of the person doing the perceiving.

For about 20 years, I was under the impression that we as risk advisers were obliged to carry out a needs analysis on our clients in order to establish a reasonable basis for our advice, so for 20 years I attempted to push the ‘proverbial’ uphill and did my best to sell insurance off the back of the fear factor:- “Back up the hearse and smell the roses!” Talk about ‘hard yakka’!

Then a little under 20 years ago I had an epiphany – I suddenly realised that we didn’t actually have to do a needs analysis on our clients. Yes – we had to do an analysis in order to justify our recommendations, but how much more pleasurable would a WANTS analysis be for our clients rather than a needs analysis? Everybody gets a lot more enjoyment out of talking about what they want than they do out of talking about what they need. I am here to tell you that this realisation revolutionised my business.

The fundamental difference between a wants analysis and a needs analysis can best be summed up with a snow skiing analogy. When putting on your snow skis, you basically have two choices:- you can either start at the bottom of the mountain and try and ski up or you can start at the top of the mountain and try and ski down. Even though I have never actually snow skied myself, it doesn’t take a genius to work out which of these options is a helluva lot more fun and a lot easier to boot! And this also sums up the key difference between a wants analysis and a needs analysis.

Taking this concept one stage further, we can identify how we can create this paradigm shift in the way our clients view their personal protection package. For those of you who are familiar with my methodology when it comes to helping the client verbalise what financial outcomes they would want in the ‘what if’ scenario of illness or accident, you will know that the two most important outcomes that every client will verbalise (if asked the right questions) are 100% income replacement and get rid of the mortgage. It is at this point that some of your more ‘switched on’ clients may well experience a paradigm shift in the way they view their personal protection package, because they may well think to themselves:- “Hang on – if I still have 100% of my income and the mortgage is paid off, then I may actually be better off!” (provided possible capital/medical expenses don’t exceed the amount of the outstanding mortgage).

And if you are now jumping up and down and saying:- “But the idea of insurance is not to make you better off!” then I say to you:- “ Well, if that‘s what my client is telling me that’s what they want and it’s what they are happy to afford (as they are the one paying the premium) and it’s what an underwriter is happy to underwrite – WHAT THE HELL’S WRONG WITH THAT?!

This is just one example of how we can create this paradigm shift in our client’s mind. So that they come to regard their personal protection package as a fantastic opportunity rather than a grudge purchase.

The Risk Workshop by Chris Unwin

Are you a financial adviser who would like all of your clients to have appropriate types and levels of personal protection? But perhaps you feel you need a more structured and client friendly engagement process?