A bit of moaning re Key Terms

PaulAA_2

Hi all,

Just thinking aloud here. Typically when you take out a mortgage your financial advisor would walk you through and and attempt to sell protection products that you may need in a low probability event such as disability, injury etc.

On the other hand over 40% marriages fail. Such an event may also result in a loss and/or forced sale. Yet a failed marriage is not on the list of key risk factors on Key Terms as mandated by the FCA.

What's going on?

Wh05apk

I'm missing something here, I could start selling divorce insurance to cover legal fees etc................


Seriously I think if I started discussing possible marriage break ups, other than vague "what if's" I would be kicked out of the meeting.

Leon_W

No discussion to be had. It's quite simply a non insurable event.


You cannot insure against something you can positively elect to do.

kingstreet

I tell clients the only thing which can't be insured against is relationship breakdown during my protection preamble.

ACG

More than 1 in 3 people in the UK will develop some form of cancer:
http://www.cancerresearchuk.org/cancer-info/cancerstats/keyfacts/Allcancerscombined/#How
152,000 people a year have a stroke - http://www.stroke.org.uk/about/who-risk - thats 3.8 million over the course of a 25 year mortgage (5% of the UK approx?)

You then have heart conditions, stress, bad backs, things like ME/MS the list is endless. I think the chances of you making a claim on one of these policies is probably a lot higher than you think.

Just to be clear, I dont start reeling all of this off with clients. It really is personal choice whether you want it or not but to say its a low probability event is just wrong.

Realistically people are more likely to insure their phone or pet than their own income/debts. I would be more upset if I lost my home due to not being able to work than if I lost my phone and had to go and buy a £10 thing from Argos or tesco.

Easiest answer to this is to take out protection and not get married. That way you have a cast iron guarantee that you will not get divorced (saving you money on divorce insurance) AND that your mortgage is financially protected should anything happen.

Thrugelmir

PaulAA wrote: »

On the other hand over 40% marriages fail. Such an event may also result in a loss and/or forced sale. Yet a failed marriage is not on the list of key risk factors on Key Terms as mandated by the FCA.

What's going on?

Relationship breakdown has no correlation to loss of income for the household in terms of repaying a mortgage. When relationships break down there's always the option of selling the property.

Let_Us_See

Ah! Fortunately, Marriage Guidance is not yet regulated by the Financial Conduct Authority!:eek:

magpiecottage

If you are going to put that in then you should start by warning your client that long before you have got through the list of all the warnings you have to give they will almost certainly have lost the will to live.