Protection wants and needs

Saloni Sardana

features writer for FTAdviser and Financial Adviser

When it comes to choosing a protection provider, what does the Baby Boomer generation prioritise, asks Saloni Sardana?

Baby Boomers are the generation often referred to as ‘having it all’, having been able to buy their own home, and possibly even a second property for buy-to-let purposes, as well as benefiting from generous workplace pensions to see them through their later years.

So this generation, defined as being born in the 1940s through to 1965, understand the value of protection.

Several commentators agree that Baby Boomers want policies that do not just cover their financial needs, but also protect their families in the event of an adversity.

Family affair

Lee Rhodes, a financial adviser at Rhodes Advisory, says: “Knowing that their family is still provided for in the event of death or critical illness is probably the most important factor [for Baby Boomers].”

Peter Hamilton, head of retail protection at Zurich UK, agrees.

“As well as protecting themselves against illness, Baby Boomers will be among those customers who want to ensure their families are looked after when they die,” he says.

The vast majority just want to know that should a critical illness strike, they are comprehensively covered and the claims process will be simple.
— Lee Rhodes, Rhodes Advisory

Mr Hamilton adds: “This means making provision to pay off any outstanding debt or liabilities such as loans or mortgages.

“Inheritance tax and funeral planning will also be needs that will be more immediately apparent to Baby Boomers.”

Olivia Kennedy, financial planner at Quilter Private Client Advisers, notes: “Our Baby Boomers are more aware that if they were to suffer a critical illness they are now much more likely to survive the experience, due to progress in medical science, yet the financial consequences of a critical illness can be disastrous to them and their family.”

Keeping it simple

There are differing opinions about whether Baby Boomers prefer it when providers offer lots of added benefits alongside their protection plans, or whether it is more important they choose providers with policies that actually pay out when the customer makes a claim.

But Mr Rhodes observes that many of the ‘add-ons’ go unused by this generation.

“The vast majority just want to know that should a critical illness strike, they are comprehensively covered and the claims process will be simple.”

“While some of the add-ons are useful, a lot of them go unused and un-remembered,” he explains.

Mr Rhodes believes this generation favour providers who pay out with “a simple claims procedure”.

Shelley Read, senior business development manager for protection at Royal London, agrees with his view.

She reasons: “Baby Boomers want transparency, value for money and simplicity. They do not want to be faced with a series of added benefits which come with a monthly cost.”

But while she says clients would not want to pay for add-ons, she also highlights that they want policies that include additional features, free of charge.

The Baby Boomer generation of customers are likely to be less cash-strapped than younger generations.
— Peter Hamilton, Zurich UK

“Therefore life products that offer benefits which are free with the policy and need no qualification to achieve are the most attractive,” adds Ms Read.

She highlights some of the added benefits available to Royal London’s policyholders, including ‘Helping hand’ which provides “emotional and practical support beyond a financial payout, from the day the plan starts with no qualification or added premium”.

This benefit is not only available to the policyholder but also to their immediate family, which might be useful for Baby Boomers who place a lot of importance on family and how they are supported.

Another of the benefits available to its customers, according to Ms Read, is an instant payout of £10,000 on a death claim.

She explains: “To assist with funeral arrangements while full payment is in process.”

Flexibility versus family

So how can protection providers appeal to the Baby Boomer generation? What do they need to know about this demographic in order to better cater to their protection needs?

Mr Hamilton points out: “The Baby Boomer generation of customers, for example, are likely to be less cash-strapped than younger generations, who may be saving for a first home or juggling nursery [fees], or school fees for older children.

“And with budget as less of an issue, they’re more likely to want more comprehensive and feature-rich cover.”

Ms Kennedy emphasises Baby Boomers need a simple claims process that is flexible.

They do not want to be faced with a series of added benefits which come with a monthly cost.
— Shelley Read, Royal London

She says: “Baby Boomers want protection cover that is simple and straightforward to understand.

“They want confidence that the policy will meet their needs and, in the event of a claim, will pay out.”

But she also stresses: “They like multi-benefit policies, which offer plan discounts for holding more than one type of policy. Our Baby Boomers also like the providers that offer discounts and rewards as part of the overall cover, but this is not usually taken in favour of comprehensive cover.”

“Most customers, regardless of age, will want a comprehensive product that covers the most claimed-for conditions and from a good provider with a solid claims record.

“Where budget is less of an issue, some added value features will be valued,” explains Mr Hamilton.

He adds: “There is a need for providers to be able to offer flexible products that suit the needs of customers at different stages of their lives – and where customers can change their cover quickly and easily.”

While family is important to customers in this age bracket, according to Mr Hamilton, some older customers may not want children’s cover built into their CIC.

“Other features, such as cover for a wider range of conditions or partial payments for less severe diagnoses of specified illnesses, may be more attractive to them,” he suggests.

Saloni Sardana is a features writer for FTAdviser and Financial Adviser

Published 01/04/2019

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