CHRISISM #18 - Is Trauma Cover Just For Old People That Get Sick?

14 June 2016

In my experience, most advisers' opening conversations with clients when it comes to Trauma Cover will focus almost exclusively on "The Big 4", namely Cancer, Heart Attack, Stroke & Bypass Surgery and the problem with this is that the large majority of clients under the age of 40 will now "switch off" because Trauma Cover has already become irrelevant for them as their perception is that it is a type of cover for old people that get sick - and you may remember from a previous Chrisism that perception is reality in the mind of the person doing the perceiving!

We need to understand that the reason why over 90% of Trauma claims in this country are down to "The Big 4" is because not enough advisers sell Trauma Cover to clients under 40 - let alone under 30.

I believe that we have a unique opportunity with Trauma Cover to claim that it is targeted specifically at every single client we sit in front of irrespective of their age. The key to motivating your clients to want the Miracle Product is to ensure that their perception right from the start is that this type of cover is specifically targeted at and relevant for them. I believe that clients of all ages can be motivated to want as much Trauma Cover as they can reasonably afford, but we need to recognise that clients of different ages will be motivated to buy Trauma Cover for different reasons depending on their age.  

Clearly the over 40s will recognise the ever higher incidence of "The Big 4" as they get older and what we need to make sure they understand is that they should buy as much as they can reasonably afford as early as possible because the rate at which the premium increases gets ever steeper with age and this is only because the likelihood of them suffering one of "The Big 4" is increasing at exactly the same rate. In addition, I believe we need to suggest to our clients that they will probably be better advised to have a lesser amount of Trauma Cover which is sustainable all the way to age 65 or 70 i.e. on a level premium rather than a higher amount that they will have to give away sooner rather than later because it becomes too expensive i.e. on a stepped premium. Ideally, of course, they will end up with a combination of the two.  

However, if you are introducing Trauma Cover to a client between say 21 and 35 years of age, then the key is to promote it as being specifically designed to cover those medical conditions to which this age group are most prone - and that is clearly not "The Big 4". The most important "traumas" to focus on for this age group are the accident related traumas, all of which make up the most common injuries sustained in car accidents, namely paralysis, major head trauma, severe burns, loss of limbs and coma (see Chrisism#5 - P Plater Protection). In addition, you should refer to the neurological conditions most prevalent with younger people, the most important being multiple sclerosis for which the average age of diagnosis in Australia is 31, it is degenerative and incurable and it can take up to 40 years to kill you, which also makes it a very expensive medical condition. Finally, cancer shouldn’t be left off the table for this age group - especially breast cancer for younger females.

I also believe all Trauma Cover sold to clients under 40 should be on level premiums - more on that in a future Chrisism or, if you can’t wait that long, in my upcoming Risk Workshop in your capital city next month (see below).

Hopefully this has helped you sell more Trauma Cover to younger clients as well as older clients. For more ideas on selling the Miracle Product to clients under 21 or over 50 as well as a bucketful of other ideas and strategies in the risk advice process, just come along to my Risk Workshop in your capital city next month and be prepared for life changing day!

 
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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?