MPA catches up with Ali Group CEO on why it's worth brokers' while to offer loan protection to their clients.
CEO and co-owner of ALI Group, Huy Truong tells MPA why offering loan protection is a natural fit for brokers.
MPA: Why should brokers consider o ffering loan protection?
Huy Truong: For a broker, moving from a monoline business to one that o ffers multiple products can o ffer many benefits, and many of our leading brokers have noted that o ffering loan protection has led to a more personal relationship with their clients, and this in turn leads to longer trail books and new client referrals.
Financially, o ffering loan protection can help brokers generate valuable additional income. Our brokers are earning, on average, $500 per policy in commission and rewards points – and it only takes 10 minutes to o ffer.
Why is o ffering loan protection a natural fit for brokers?
HT: The reality is unexpected life events could impact on a client’s ability to meet their loan repayments. Brokers are arranging loans that require servicing with cash flow, so it is important to protect that cash flow. Loan and loan protection therefore goes hand in hand, like buying a house and protecting it with home and contents insurance (which we also have available to brokers through QBE).
What happens if a broker doesn’t have any fi nancial planning qualifi cations? Can they still o er their clients loan protection?
HT: Yes! ALI Group provides a general advice product which means brokers can o er loan protection themselves after undergoing a simple three-step authorisation process.
Our brokers convert between 20% and 40% depending on their clients’ demographics, and we even have some brokers converting at over 50%, but it’s fair to say they are the exception. The reality is that, unlike general insurance, life insurance is a very personal discussion and clients generally prefer to do so face-to-face within a very relevant context, such as how they would service their loan if an unexpected life event were to occur.
What product o fferings does ALI Group have for brokers to provide to their clients?
HT: Through ALI Group, brokers can offer their clients the Loan Protection Plan, which provides homebuyers with cover for critical illness (trauma), death and terminal illness, and involuntary unemployment.
Critical illness cover is usually not available through superannuation and is becoming increasingly important, as advances in technology mean survival rates and treatment costs are on the rise. ALI Group’s critical illness cover pays a lump sum to the client that can be used in any way they wish, from helping with large debts (such as a mortgage) to unexpected medical bills. In addition, authorised brokers also have access to home and landlords insurance through QBE, which they can o ffer and put in place themselves. This ensures their clients are receiving a positive customer experience, end to end.
“Unlike general insurance, life insurance is a very personal discussion”
MPA: Why should brokers consider o ffering loan protection?
Huy Truong: For a broker, moving from a monoline business to one that o ffers multiple products can o ffer many benefits, and many of our leading brokers have noted that o ffering loan protection has led to a more personal relationship with their clients, and this in turn leads to longer trail books and new client referrals.
Financially, o ffering loan protection can help brokers generate valuable additional income. Our brokers are earning, on average, $500 per policy in commission and rewards points – and it only takes 10 minutes to o ffer.
Why is o ffering loan protection a natural fit for brokers?
HT: The reality is unexpected life events could impact on a client’s ability to meet their loan repayments. Brokers are arranging loans that require servicing with cash flow, so it is important to protect that cash flow. Loan and loan protection therefore goes hand in hand, like buying a house and protecting it with home and contents insurance (which we also have available to brokers through QBE).
What happens if a broker doesn’t have any fi nancial planning qualifi cations? Can they still o er their clients loan protection?
HT: Yes! ALI Group provides a general advice product which means brokers can o er loan protection themselves after undergoing a simple three-step authorisation process.
Our brokers convert between 20% and 40% depending on their clients’ demographics, and we even have some brokers converting at over 50%, but it’s fair to say they are the exception. The reality is that, unlike general insurance, life insurance is a very personal discussion and clients generally prefer to do so face-to-face within a very relevant context, such as how they would service their loan if an unexpected life event were to occur.
Fast fact
The proportion of family income required to meet loan repayments rose from 31.7% to 32.4% from the September quarter to the December quarter of 2015, according to the REIA/Adelaide Bank Housing A ffordability Report.
The proportion of family income required to meet loan repayments rose from 31.7% to 32.4% from the September quarter to the December quarter of 2015, according to the REIA/Adelaide Bank Housing A ffordability Report.
What product o fferings does ALI Group have for brokers to provide to their clients?
HT: Through ALI Group, brokers can offer their clients the Loan Protection Plan, which provides homebuyers with cover for critical illness (trauma), death and terminal illness, and involuntary unemployment.
Critical illness cover is usually not available through superannuation and is becoming increasingly important, as advances in technology mean survival rates and treatment costs are on the rise. ALI Group’s critical illness cover pays a lump sum to the client that can be used in any way they wish, from helping with large debts (such as a mortgage) to unexpected medical bills. In addition, authorised brokers also have access to home and landlords insurance through QBE, which they can o ffer and put in place themselves. This ensures their clients are receiving a positive customer experience, end to end.
“Unlike general insurance, life insurance is a very personal discussion”
