I found it difficult to feel any sympathy for Heather Mills as she stood on the steps of the law court ranting about her divorce settlement of £25 million, when I read that many living in the UK are on the verge of bankruptcy.
This is a stupendous amount of money and most of us could live very handsomely on the interest on such a stack of cash. And there she is challenging whether Sir Paul is in fact worth £400 million or £800 million. I cannot imagine what having so much money would mean.
The problem is that these days we are constantly exposed to telephone number amounts of money and equally excessive statistics that we almost become immune to the message they are trying to convey.
For example in 2003 the UK Government spent £2.3 billion on job seekers allowance, just over £42 billion on pensions and £38 billion on defence. These are staggering amounts of money and most people would have difficultly saying how many zeros they include let alone understand how much it really is, especially if they are scrambling around desperately trying to find £150 for the minimum payment on a maxed out credit card.
The media surrounds us with such facts and figures in our daily lives but we are just as guilty of it in the protection industry. The protection gap for life cover according to Swiss Re is £2.3 trillion and the income protection gap is £150 billion. What possible use are these figures to the average person on the street?
What we need to be demonstrating are the individual personal protection gaps that people have. It might be £80,000 but at least it is a figure that most people can get their heads round especially as it is a reasonable multiple of their annual salary. Even the figures we quote around illness incidence - for example 500,000 people die each year from heart related illness - are maybe too high to really mean anything.
Perhaps we should be saying that enough people to fill Wembley Stadium ten times over will have a heart attack each year. Or perhaps a better analogy would be 500 jumbo jets crashing each year with no survivors. The public would certainly take action if that was a reality. We cannot get people to act on statistics unless they understand or can comprehend the scale of the figures used.
So how can we transform the telephone number statistics into calls to action amongst our customers? Well in reality we should be doing it anyway as part of the fact find. For life cover a person’s individual protection gap would be their mortgage, the maximum potential debt on their credit cards and loans, and enough of a lump sum to replace at least 75% of their income (less any existing life cover of course). Their individual income protection gap would be replacement income of up to 75% of their salaries.
It’s not hard and it’s not rocket science, but perhaps we become too seduced by the massive headline grabbing figures and the reality is that these do not motivate people to buy protection products. The consequences on their lifestyles of not being able to work, explained in real terms and in real life figures should be much more convincing.
Roger Edwards, Product Director, Bright GreyIFAonline
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation