COLUMNS • INSURANCE
Struggling clients need advice Clients struggling to pay their premiums need sound advice to help them weather the storm, writes Steve Wright. BY STEVE WRIGHT
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rom time-to-time, clients fall on hard times and in tough times, like the pandemic, can have difficulty paying their premium. Times like this are when your good advice can be invaluable. So what can you do to help them? As usual, each client’s specific situation and needs must be taken into account, but there may be several possible suggestions or recommendations. Here are some of my thoughts on the subject.
Make sure they come to you first It is essential to keep reminding clients to talk to you if they are having trouble with any aspect of their life, disability or health insurance. Talk to you BEFORE they take any action. There is no shame in falling on hard times, but taking action without advice can be very costly.
Never cancel a policy without advice The worst thing any client can do is to unilaterally cancel their policy. Cancelling any life, disability or health policy can be disastrous, especially if simply done due to temporary affordability challenges. Aside from being completely exposed to the financial risk the policy was protecting them from, if the client’s health has deteriorated since they first took out their policy, they may not be able to simply start up new cover again. 032
TMM 01 • 2021
‘Premium structures can be reviewed to see if there is a more appropriate premium structure for the immediate term’ A new policy will require underwriting and take their deteriorated health history into account, possibly meaning loadings and exclusions not present before. In the worst case, their health may result in them being uninsurable, no cover being offered, and leaving them unprotected – possibly permanently!
Premium holiday and policy suspension Many Kiwi insurance companies include some very valuable and sometimes generous, premium holiday or policy suspension benefits (and sometimes both). If affordability is a short-term challenge caused by a specific event like redundancy, then clients can apply for a policy suspension or premium holiday if these are provided for on their policy. Recent Covid-19 relief offered by insurance companies has seen many clients save their policies by taking advantage of premium holidays or policy
