If you are looking at taking out protection insurance with your mortgage there are two paths to follow - advised or non-advised. But how do they differ and which is best? Sam Salim of Alexander Hall explains
There are a lot of things to consider when looking into your protection insurance options. There are myriad variables that can determine what the right option is for you; the type of cover, the amount of cover and what you can afford will all drive the final policy you choose to put in place to protect yourself and your family.
There are two main routes for customers seeking your protection options.
- Advised
- Non-advised
The purpose of this article is to highlight the key differences between these two different paths and the implications for you as a consumer.
Advised
Alexander Hall Associates offers an advised service. Before considering making a recommendation, our advisers complete an in depth ‘fact find’ to establish client circumstances and to identify specific protection needs.
Unlike general insurance, financial protection is not a ‘one size fits all’ product and factors such as workplace benefits, savings and health can all have an impact on the final recommendation made.
It is only once we have the full picture of our client’s personal and financial circumstance would we then look to approach the insurance market and make a bespoke recommendation, followed by a ‘statement of Demands & Needs’ which details the recommendation and the justification behind making it.
Going down an advised route can therefore be a more personalised experience. Clients will usually have a dedicated adviser working on their application, as well as a team of case managers handling progression of the case, updating clients along the way.
Advisers will remain engaged with the client to tackle any challenges that arise along the way.
Non-advised
A common ‘non-advised’ route is for customers to go online and find out the products available. This would be useful for somebody who knows what they want and wish to secure cover without speaking to somebody first.
It’s also possible to speak to a protection broker through the non-advised route. Though the process is similar to receiving advice, the outcome can actually be quite different.
Brokers offering a non-advised service will also take personal information and help you with the application process.
They can also explain terminology and how products work, but they won’t at any stage offer advice on the most suitable solution or give a recommendation.
Firms offering only non-advised service will often not be expected to undertake such a detailed investigation of customer circumstances.
The key thing for customers to be aware of, is that the responsibility for ensuring the cover meets their needs falls on the customer themselves. For this reason, customers won’t receive the same level of protections or support from the Financial Ombudsman Service if in the future, they were to raise a challenge over the suitability of the product they had arranged.
Which is better?
There are several ways to take out protection insurance, each has pros and cons and can help people in different ways.
An advised route tends to suit those who recognise a need for cover but aren’t sure what they want and need an expert to advise and navigate them through the process.
Many people may choose a non-advised route, which is using the likes of a price comparison website or applying directly on an insurer’s website, something which is becoming easier to do. This option can be quicker and for some may be more convenient.
In the event an applicant has certain health disclosures to make, the process can become incredibly complex.
Experienced advisers will also tend to know which insurers can be more flexible and more competitive on premiums for people with some form of historical illness. This is insight which comparison sites tend not to provide with the same level of accuracy.
How to get the advice you need
When considering protection there are many factors to consider to help get you the right level of cover at the right cost.
My team and I are on hand to answer your questions and queries. Feel free to contact me on: sam.salim@alexanderhall.co.uk to discuss any of the points raised, or visit www.alexanderhall.co.uk.
