About five years ago I had a couple in with me who were buying a home, I was helping them to determine their insurance needs and I realised that they had literally no protection if either of them ever fell seriously ill – not via their job/employer schemes or individually. So I suggested that they consider some serious illness cover, it would have cost them about €20 a month but they were insistent that they only wanted what was ‘cheapest and nothing more’.
As an adviser, it isn’t my job to always accept what people say they want because often, with adequate probing and understanding they actually want something entirely different, a skewed but simple way of understanding what I mean is that when saving or investing the majority of people want ‘high growth and high security’ – when in fact, these two features are normally night and day, if there ever was an asset that could deliver high growth with deposit account style security then everybody would pile in and the market would adjust accordingly, therefore you need to find out what a person actually wants more, growth and the accompanying risk, or security and the accompanying lower performance.
Back on topic – I explained why they should have serious illness cover (also called critical illness) and they flat out refused to listen, I asked what would happen if one of them got seriously ill to which I was told ‘I’ll go to France’ (one of them was French), this is one of those answers that threw me entirely: I mean, after a decade I thought I had heard it all but the idea that you could have a heart attack and then just fly off to France as a meaningful solutions just baffled me, to the degree that internally we sometimes joke around in the office when somebody makes an error and in asking how they will rectify it they answer ‘I’ll got to France’, it has become an in house punchline (thankfully not required very often!).
Anyway, I got a call two months ago from the husband in this couple, asking me about their insurance policy, wanting to know if it had any benefits attached to it other than life-cover, I quickly responded ‘no’ but wanted to know more – then I heard a story that quite literally broke my heart, perhaps I am going soft in my age or since I became a parent but it goes something like this: The couple had a child six months ago, the mother had some sort of allergic reaction when the baby was 3 months old and her throat swelled rapidly, she actually wasn’t able to breath at one point, for long enough that when they finally got to a hospital that they thought she might die.
She lost air for long enough that she had severe brain damage, and now in her own husbands words she is ‘a vegetable’, this isn’t some old lady, some stranger, some random story, this is real life, people I had met and seen afterwards in full health. So the husband is left in a situation where he can’t go to work any more because he has a young baby and wife to look after, they don’t have any money and there has been no payout on the insurance policy because they opted not to cover the risk, ironically, things won’t improve if they go to France either, they have already looked into that.
They will be losing their home eventually as the arrears are building up rapidly and there isn’t a damn thing I can do about it to help, I’m angry about it…. While I couldn’t have saved this lady, I could have ensured that they had a lump sum with which to either pay off the mortgage, or to live off, or if they wanted to go to France then they would have been able to sell the unencumbered property or use the money to move there and live off while renting out the home, it doesn’t really matter, it would have given them options.
I didn’t make sure they bought what I knew they needed, instead I let them determine their needs and didn’t hound them to do what I knew was the right thing to do. I didn’t do anything wrong in that, the only power I have is to make a suggestion and weigh up the pro’s and cons’, the line I like to use when talking about insurance is ‘you must identify and quantify the risk, then take appropriate steps to mitigate that risk at a reasonable price’. If I had been more forceful they might have taken out the cover, but that kind of behaviour will actually get you in trouble with the Ombudsman – strong arm selling is wrong and shunned for a reason, but when you allow a client to supersede your knowledge, knowledge gained from a decade of experience, study and daily practice – then you are essentially powerless to do your job right.
I thought about calling a radio show or something to talk about this but after my first enquiry quickly realised that it isn’t the type of story people want to hear, if I had instead ripped off a granny it would be everywhere, but in failing to protect a person there was nothing worth broadcasting.
This is a real life story and it has taught me a valuable lesson: people need to know that bad things happen to regular people, Jade Goody is an example, Lance Armstrong is another, illness doesn’t discriminate between the rich and poor, or the unknown and the celebrity – Some cynics will say ‘you just wanted the extra money!’, and that is a fair accusation but the €120 difference it would have made to a firm of our size is meaningless, we won’t be made or broken on that. So if you ever happen to find yourself seeking my advice, please know in advance, my suggestions are based on something greater than statistics, it is based on several clients I have had the pleasure of knowing who are in some cases dead, or in others in seriously bad shape. This is the real world and clients have taken their own life, died in accidents, had serious illnesses and experienced all of the tragedies you read about daily, ‘protection plans’ don’t really protect you, they are in fact quite selfless, they only serve to financially protect the ones you leave behind for the most part.
And that’s the thing, if insurance and finance bores the hell out of you then you need to know a guy like me, because I love it, I love what I do and the fact that almost no other industry would allow me the ability to sit with people and figure out ways to help protect their family if something bad happens while changing their financial future for the better, and I believe totally that I can make any person better off financially – if you aren’t happy with your finances, it doesn’t have to stay the way it is now, if you want more of it then you can make a plan, and the truth is that even with markets in turmoil or all the bad luck in the world, many of our clients still come out on top because they also change the way they think about money, and about what they hope it can do for them, more importantly – what it can’t.