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Income Protection sales techniques

Many advisers we work with use simple sales sales techniques to help clients understand the importance of protecting their income. Here are a few tried and tested ideas:

How do you set out your stall with your clients and where does the ‘protection conservation fit in?

Most protection is sold/taken out as a result of a life event, and most commonly when buying a/or moving home. The new MMR regulation is focused on people’s ability to afford and repay their mortgage. But the regulations fall short of requiring a borrower to have provisions in place to afford and repay their mortgage if their income stops.

As a professional adviser doesn’t it make good sense – and prove your value – to ensure your client is taken care of no matter what happens (good or bad)?

How do you set out your stall with mortgage clients? Some explain it very simply along the lines of

“I’m here to help you get the home you want and make sure you keep and enjoy it, come what may.”

Do you talk about the importance of affordability if the unexpected happens and the journey you’ll take them through? This doesn’t mean you have to dive straight into a protection fact find. It simply helps the client to buy into you, into what you do and what it gives to them. And it avoids any unwelcome surprises or awkward conversations down the line.

Some advisers manage expectations by asking for an overall mortgage and mortgage related ‘monthly budget’ from their client and ‘contract’ to work to this for both the mortgage and relevant protection (which could include buildings and home & contents too).

Where you fit the ‘protection’ conversation into your process is down to you. It needn’t be a totally separate exercise. As part of the affordability discussion for a mortgage many advisers capture income and outgoings. You can use a budget planner for that purpose, and start to sow the protection seed for later.

Designed to illustrate that many people forget to insure their most important asset... their earning power.

4 Boxes with £1k (TV), £10k (car) £100K (house) and £1m (anything precious).

Firstly draw a grid of 4 boxes. Write £1,000 in one box, £10,000 in the next, £100,000 in the third and £1 million in the last (or use more up-to-date or client relevant values, but hopefully you get the idea!)

Discuss each box in turn.

£1,000 represents the value of their plasma TV/surround system - does your client have theirs insured? (Most people do as part of their contents insurance).

£10,000 represents the value of a typical car. Is theirs insured? (Car insurance)

£100,000 represents the value of their home (you may want to update this amount to reflect house prices in your area!). Is theirs insured? (Buildings insurance)

Finally the £1 million box - ask your client what asset that might represent? It's by far their biggest ... The answer - is that it represents their present and future earnings.

Your client's income pays for everything in the other boxes and in life too, now and in the future. So ask and discuss, why don't they insure that? And they shall see the light....

Designed to highlight the source of the everyday things your client pays for, consumers and enjoys.

You unlock the door to the cellar and down you go. There is a strange machine. You switch it on and crank the handle. Out come hundreds of shiny £1 coins, enough to pay the mortgage, feed and clothe you, keep you warm and safe.

Now you find out that the manufacturer has gone out of business and the machine can never be replaced.

However all existing owners are offered a maintenance contract that, for a few pounds a month guarantees to keep working to produce the pounds you need each week. Would you take it? Of course you would.

The manufacturer is the client. The machine is the income the client produces each week. If the client is unable to work the money stops. The maintenance contract is ‘income protection’. The premium is the cost of the maintenance contract.

A client’s lifestyle might soon disappear if their income stopped. Save their life from going down the plughole.

Plughole surrounded with Income, Pension, Savings and Mortgage.

Draw a box and divide it into 4 quadrants with a circle in the middle> Write ‘Income in the top left box, Pension in the top right, ‘Savings in in the bottom left and ‘Mortgage/Rent’ in the bottom right.

Suggest that your client isn’t able to work for a period ( a week, 1 month, 3 months… whatever you feel is relevant to them, depending on what sick pay they might get for their employer)

After that period, they’d lose their income (cross this box out)

Next, they might stop paying into their pension (cross this box out)

They could use their savings to get by and may pay their mortgage and bills for a while… until they run out (cross out the savings box)…

… which would mean that they stop paying for their mortgage/rent… and lose their home (cross that box out)

Essentially, their life would disappear down the plughole…

Explain that you can give them a ‘plug’ that would stop all of that happening. It’s called income protection, would they like to learn more?

A simple questioning and listening technique to help clients explore the impact of something ‘going wrong’.

A budget planner together with the simple ‘PIGY’ questioning structure can help this really come alive and make matters far more emotional.

It’s amazing how things add up. Use our budget planner to list and total all the things that a client pays for from their take-home pay. Then compare it to what support might be available from the State if they were unable to work because they were ill. Time to use ‘PIGY’

If you were unable to work…

  • “What Problems would you face?”
  • “What Implications would that have (for you and your family)?”
  • “What would you want/have to Give up?”
  • “How would that make You feel?”

Quickly positions the need for financial protection and generates a personalised risk report.

A simple and powerful online tool to help your clients grasp the importance of financial protection in just a few seconds. You just need to enter four personal details about your client and instantly their personalised results will reveal the likelihood of them...

  1. being unable to work for two months or more (due to sickness or accident)
  2. suffering a serious illness
  3. dying
  4. and the probability that any of these could happen before their chosen retirement age.

Help make your protection conversations with clients far more immediate, personal and real.

Visit our Risk Reality Calculator

We hope you find these ideas, guides and tools useful. If you have any feedback, please email us or speak to your LV= account manager.

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LV=, County Gates, Bournemouth, BH1 2NF, UK