Of all the things that amaze me with this business its that mortgage protection assurance is so easily dismissed, by which I mean customers resistance to buying a policy that aims to pay off their mortgage debt in the event of death or if they get a critical illness. Indeed its more likely that those with middle incomes are either more oblivious or just stubbornly not going to take a policy because it gets raised by an advisor!
We all hope that during the course of our lifetime nothing bad happens to us. I hope I don't get cancer, have a heart attack, stroke or find later I have dementia or fall over because of Parkinson's disease.
We are still coping with the coronavirus and who knows what else is around the corner? Yet sadly if we just take cancer alone, 1000 people a day [1000 A DAY] are having a conversation that goes..."Arh I'm so sorry to tell you, you have cancer.."
What that feels like I have no idea and I hope I never find out and I hope none of you reading this ever have to find out.
But lets be clear HOPE is not a strategy.
A cup of coffee in 2021 at Starbucks is about what? £2.50? Maybe you take an extra shot with some extra syrup and toppings? You're that guy who holds up the entire store because of the complex nature of expressing the actual drink you want and then having them make it!! But look annualise that. £2.50 per day - that is nearly £1000/yr on hot water and beans. It's OK because you make £50K a year and so it makes literally no difference to your life.
Indeed very often early in a conversation people are proud about their incomes. They are proud [and rightly so] that they are doing quite well in life financially and good for them.
Yet their mortgage is not the only monthly expense and that is less so for people on middle incomes and I focus upon this group because its they that take the conversation about mortgage protection as a big sell, and it really isn't.
If you have £500K of mortgage debt then likely you have a couple of cars, maybe on finance. Maybe a couple of children in private education, weekend activities, holidays, one in the summer another skiing in the winter. Eating out a couple of times per week isn't cheap, neither is the ongoing utilities, phone bills, everything SKY tv package and so it goes on...
Further financial planning to account for all of life's expenses would be prudent BUT as a starter having the downside protection for what is likely your major monthly expense is smart.
Without it what do those hours after the "Arh I'm sorry to tell you, you have cancer" feel like? Well to start with it doesn't even have to be you. What if your partner is the victim? They have less than a year to live and you're going to waste what time you have left going to work to keep a roof over the families head? What about a degenerative disease? Want to only spend time with them when they are at the end?
Its a wake up call because finding out after that you should and could have done something is no use at all.
People say "Yes but it might be a waste of money, paying all those premiums for nothing..."
I say "That would be a good thing wouldn't it? because it meant you didn't get cancer, didn't get a heart attack....." but if you did then perhaps it pulled you out of the financial fire.