In ignoring protection, advisers are missing out on servicing client needs and on a valuable long-standing income stream.
Neal Jannels (pictured) is managing director of One Mortgage System (OMS)
The potential attached to the selling of protection has been highlighted for many years, but it is still widely undersold by many mortgage intermediaries.
This is due to a combination of factors. It can be a complex area for advisers not well versed in this area, access to the right products may also be an issue for some, and the fact remains that it can often be a tough conversation to have with clients.
However, in ignoring protection, advisers are missing out on servicing some important client needs and potentially failing to tap into a valuable, long-standing income stream.
As an industry we often associate protection needs with homeowners, but it was interesting to see recent data suggest that the majority of renters are putting themselves and their possessions at risk because they do not have vital forms of insurance in place.
Research from Aviva uncovered evidence that just one in five rental households had life insurance, compared to three out of five homeowners with a mortgage.
The figures are particularly concerning because the number of renters in the UK is rising, a trend driven by high house prices and other challenges which make it difficult for would-be first-time buyers to get on the housing ladder.
A further study from Sainsbury’s Bank appeared to back up this trend, finding that while 41% of homeowners had life insurance or critical illness cover, just 26 per cent of those renting had such a policy in place.
But how does this affect my business I hear you cry?
Protection is often seen as an add-on to a property related transaction, but in the modern mortgage market is there an opportunity to flip this on its head?
Could it be used to open the door to potential clients who are currently renting but may be looking to satisfy their homeownership needs in the near future?
After all, the average age of FTBs is still rising and more families than ever are renting for longer before being able to get onto the property ladder.
A greater protection take-up amongst tenants could also benefit landlord clients by helping to reduce the risk of rent arrears due to a benefit shortfall or lack of savings.
Failing this, being in a better position to meet the protection needs of potential and existing clients can never be a bad thing and, through technological advances, navigating your way into this position is now easier than ever.
There is now greater accessibility to cost-effective systems which offer the ability to research and easily compare all protection needs – and apply directly - within a simple and responsive user interface.
Any protection related discussion is never easy, but it is one that a growing number of homeowners and tenants need to be having.
Helping to bridge this protection gap could not only provide valuable ancillary revenue for intermediaries but also act as a valuable retention tool in building long-standing relationships lasting way beyond any initial property transaction.
