Life Search: Protection for Middle Age

0:00Pete Matthew: Hi folks and welcome back to Meaningful Money. Just me today. This is session number 628. And today I'm having a conversation with Justin Harper who is the Chief Marketing Officer for LifeSearch. Now, long-term listeners will know that I've had a great relationship with LifeSearch for ages. I refer audience members, people listening and watching to LifeSearch if they've got any questions about life insurance, income protection, critical insurance, all that sort of stuff. They are insurance advisors, and they do a brilliant, brilliant job at it. I've used them myself for setting up my own stuff, even though I could do it as a regulated financial advisor.

0:37Pete Matthew: It's not really a specialism for us. And so I've used LifeSearch myself in the past, fairly recently, actually, and many of you listening and watching have as well. So I wanted to have a conversation really about life insurance a little bit later on in life. We tend to talk about it most for younger adults. and that kind of life stage but it's still important in our 40s and 50s so I asked Justin to join me to have a conversation about that I guess there probably won't be any surprises in this conversation because it's a lot of the stuff we talk about is a recurring theme here but at the same time I think it's important to bring it front of mind so without further ado here is my conversation with Justin Harper so it's my pleasure to welcome to the Meaningful Money podcast Justin Harper from Life Search.

1:27Pete Matthew: Long-standing listeners to the show will know that I've had a great relationship with Life Search for a lot of years now and many of you listening and watching will be clients of Life Search as a result. So we wanted to talk today about protection, life insurance, all that good stuff but perhaps coming at it a slightly different way but before any of that Justin welcome sir how are you doing today? I'm very good thank you good to join you great to have you with us yeah good uh to spend some time the listeners as well yeah absolutely and i'm looking forward to it'll be uh it's uh obviously listeners don't know but it took us a while to to get to this stage which is entirely my fault we're here now so it's it feels good to be doing it at last so just give us a bit of an intro justin who are you what do you do at live search and how did you get here how did you end up doing what you do um yeah justin Harper, Chief Marketing Officer at LiveSearch.

2:22I've been in the industry and we call it the protection industry. It's always a bit weird because people often say, well, are you in some form of bodyguard? No, no, it's typically, it is your life insurance, your critical illness and your income protection. And I was introduced to the industry because I'm a failed artist at the age of 19 by my stepdad. And he said, well, actually I worked for, at the time he worked for Gresham Life you might remember them oh wow yeah way back and yeah he said it's good industry good good job and I started as a as a mortgage admin assistant way back and then I've been tended to be involved in protection in one shape or form pretty much throughout my last 40 years working so mainly for for insurers actually building products doing sales training all sorts communications pr uh and over the last 10-15 years concentrated more on that product development and marketing mainly to advise us and then at live search broadened it i suppose because i'm now dealing both with partners we deal with other organizations as well and help them introduce protection to their customers but also directly to customers as well so increasingly a lot of my time spent explaining what we do what protection is why it's important how it works cool and so

3:44Pete Matthew: So we're going to talk today about sort of middle age, let's call it. I mean, that's a sort of funny term, really, because, you know, nobody wants to be called middle aged, do they? No, no, no. We need to sort of define it, I think. Yeah. So shall we talk about, let's say sort of broadly 40 to 60? Yeah. It's a broad church nowadays, isn't it? Yeah, it is. And I guess what I was thinking in sort of preparing for this was really, you know, we tend to talk about protection mostly for younger adults. So, you know, either they're getting their first mortgage or kids are starting to come along. And suddenly it's like it matters if anything happens to them.

4:30Pete Matthew: Right. But in my experience, the protection conversation tends to drop off as we maybe the kids fly the nest. Maybe the mortgages are, you know, finished or nearly finished. And it's more in kind of wealth building. You know, we're in our peak earnings years and all that sort of stuff. So, I mean, why do you think it tends, this whole conversation about protection tends to drop off in later life? Why doesn't it sort of stay top of mind? Yeah. And you touched on a few instances there. I think in many cases people take out, when they do take out some form of protection insurance, typically life insurance, it's usually when they're embarking on a big life stage commitment.

5:10most life insurance taken out with a mortgage or having kids and starting that family that's when some of those financial commitments either forced upon you or voluntary to become more apparent and I think as you drift into your 40s and 50s you actually say you're then starting to settle you're building your wealth you're building your family and and you're concentrating more on your lifestyle and looking after your family and the future which is then about not working hopefully it is about your pension retirement um so i can see and understand why people start to to feel that the importance of protection drifts away when in fact it probably becomes more complex and as you've got more to protect financially probably more important as well okay so let's

6:06Pete Matthew: kind of go with that then what are the things in middle age that might actually then make protection more important or increase the need for it uh a couple of things really i think one of the things that we've we've got to be considerate of if you're working uh and most of us will be in the in our middle ages looking forward to not working soon um is that our income is vitally important it pays for absolutely everything so be that your your mortgage your lifestyle your holidays but also your future as well and i think that that is increasingly important is that yeah your income pays for everything uh that's one point uh let's not forget that uh and i think individuals whilst they may feel they're comfortable uh if you're like me and people i know then you kind of live within your means but right at the edge of your means and if something were serious to happen to you or a member of your family then the consequence consequences can can hit pretty hard and pretty quick, actually.

7:07Yeah, for sure.

7:08Pete Matthew: Do you think it's sort of, people get a little bit too comfortable? You know, it feels like the need is less acute, as you say, it's arguably more so, because we get to the point where we've shifted our focus away from raising our kids, paying down the mortgage or whatever, and now we're in the sort of last 15, 20 years, we're really trying to amass money so that we don't have the work. And as you do that, it's like, okay, maybe I don't need it so much, I don't have the mortgage. but so do people just feel a bit more comfortable and and less kind of at risk do you think it's a question of priorities isn't it is that if they're focusing more on what i want to achieve you know i want to have a safe you know comfortable retirement spend time with the kids uh and so on and so forth then those are the kind of things that people naturally want to think about i mean when you're talking about insurance life insurance or income protection you're talking about things that people don't want to talk about or think about yeah it's like oh i really don't uh so one it's kind of pushed the back of the mind because being particularly british as well i suppose as a culture we don't talk about the bad things so much and just everything would be fine tucking under the carpet um but uh but also is it's it's i think we also have to accept that we're not invincible and it's clear now whilst i feel younger than i am there are definitely times when i bend over and you went to go pick anything up you're probably the same is that you've grown and you realize just how um perhaps not inflexible you are and and you're more likely to be suffering from health conditions be it high blood pressure or you know being diagnosed with a serious illness even so do you think that last point is also a factor because there's maybe an assumption that okay yes i'm older and yes there's probably more stuff going wrong and so life insurance is going to be or income protections insurance is going to be very expensive do you think people kind of write it off because they think it's going to be too expensive before even looking at it yeah we definitely we we hear that from from some of our customers and even people who don't even reach us because they've already made that conclusion.

9:18It's going to be too expensive for me or I can't get it. So I think it is about putting that disbelief aside and finding out a bit more about what it is I need, what it is I should have, how long for, how much. And I think it is surprisingly affordable, even at a younger age, because it's going to cost me tens, hundreds of pounds to get some cover. Whereas, let's give you an example. i suppose 200 000 pounds is the typical cover amount that people take out for whatever reason for 25 years if i'm 30 years old that'll cost me about eight pound a month yeah it's not a lot is it not a lot uh for 200 000 pounds um if i'm 50 51 then that's probably in the 40 to 50 pounds kind of mark so for a 25 year policy for a 25 year policy yeah that will pay out take you well into retirement if you're you know non-smoker in good health yeah but um but that gives you kind of an example of just that's how forward wall is many people might be thinking it's going to be way

10:25Pete Matthew: more than that um yeah sure i i wholeheartedly agree with your comment about income covers everything i mean whenever we talk about protection here it's always like you need to think about what is the primary risk or what is the primary outcome of any of the risks happening so you die early, you know, you suffer a critical illness and survive, or you are unable to work. And ultimately, the outcome of all of those is the loss of your income, either permanently, or for a period of time. And as you rightly say, income drives everything. You can't save for retirement if you don't have an income. You can't help your now adult children, you know, if you don't have an income.

11:07So do you see like, is it mostly life insurance?

11:12Pete Matthew: Or is I always think income protection is undersold and underused right that's something we've talked about how do you what sort of let me put this another way your your clients in the kind of age bracket that we're talking about what kind of um split we're talking is it mostly life insurance or is income protection uh being taken up as well yeah it's it is a it is a mix predominantly life insurance that's what most people come to us for initially uh and i suppose one of the benefits of having a conversation with someone like life search is that we won't just want to take your order we'll um we'll we'll look to understand the situation what's really important to you uh so we we see a a healthy take-up of income protection amongst our customers probably about one in four have income protection as well as life insurance yeah that's a high proportion i think i remember somebody back one of my early days of my training telling me that life insurance of all kinds including a protection has to be sold it's not something that people kind of wake up one day and say right what i'm going to do today is nobody wakes up with that stonking urge for a bit of life insurance do they really no exactly but of course there's um some people worry about being oversold but actually one thing that's been universally fed back to me from life search clients uh that i've introduced to you guys is that that never happens but actually the advice is sound and it's based on affordability of course and that sort of stuff but sometimes you need to be nudged don't you yeah to do what's what's right yeah it's because there is there is a big perception and understanding gap people just aren't familiar with what what real risks they face nor what solutions are available so yeah yeah so what for folks in this bracket then what are the sort of clear signs that that they definitely still need cover what are the things that they need to be thinking about covering yeah uh well the first question i'll go to is who is dependent on you and your income that's and if you go not generally and that even applies if you're an you know single individual with no no dependents no family is is that because you know if something were to happen you're unable to work then where's your safety net that's you uh so i think that's that's your first point of call who is dependent on you financially or even practically as well so who needs you to be around yeah exactly so maybe even elderly parents they might not be financially dependent on you but actually if you weren't around then their needs may have to be met by a third party carer or something like that and maybe you could provide for that if that's important to you that's something which definitely doesn't come up often so it doesn't probably it's not talked about enough not talked about enough and i'm i's you uh you might be the same but i'm in the sandwich generation i've got my my mum's still around um my father passed away years ago but um but uh she lives abroad with with uh my stepdad now and uh yeah i'm conscious that whilst they're okay at the minute well he's really poorly but uh yeah but they're okay for the minutes that i've got some caring responsibilities for them as well and i'm not alone and many many of us kind of as the kids grow up they never fly the nest either to be honest but also increasingly it seems that so we've got those responsibilities caring wise or just being around and looking after them yeah no that's a good shout and i one thing i see quite often as well is quite a disparity between in a couple quite a disparity in earnings and obviously because of the nature of the society we live in very often that's uh in a same sex um in a sort of heterosexual couple that's where the guy earns a lot more um than the lady yeah so that's obviously something to think about as well isn't it yeah and that's one of the things we we try and draw out of our customers is that and clients is typically we're approached by by the male actually not always the case um increasingly it feels like, well, if it's anything like Mrs.

15:21Harper, then she's the one who runs the household, she runs our finances, and has got her finger on the pulse. But it is important to consider the lesser earning or even non-earning partner. The fact that they don't earn doesn't mean that they don't have a value. And so I was speaking to one of my colleagues last week and we're talking about value of a mum you might remember that there's some research that legal in general used to do i think i don't know if they still do it anymore um but uh and that was almost a stay-at-home mum and how would you replace them and i think it amounts to something like 30 000 pounds a year financially to replace you think well actually that's pretty good rate to be honest um to look after kids look after the family ferry stuff around so yeah we shouldn't lose sight of the fact that it's not just the earning person or higher earning person yeah sure

16:21Pete Matthew: um i think a key part of protection is um self-insuring you know so for instance when we're talking about like people understand the basics of finance we talk about the need for protection but like the start the foundation of it is uh an emergency fund right something that you can do to put a buffer between you and the world and is there a point you think where people you know maybe if they're in middle age and they've got more assets behind them that they can genuinely be financially independent enough so that they don't need insurance at all surely there's got to be some kind of threshold it'll be individual of course but surely yeah I'll go back to my point that if people are reliant on your income then that's the first question to test and an emergency fund again I was looking at some research the other days that there are very an increasing number of households who have no emergency fund and typically you're looking at would you have three months worth of outgoings as an emergency fund but even then that won't really last you very long at all soon get depleted uh and that's where reinsurance can can play a role and that additional safety net um to answer your question though i think if you're working then i think there's always some need right somehow and somewhere if you're in retirement then maybe lesser because you can't you're not looking at non-earned income then but um but yeah i think generally there is a degree of need i mean when i think my sort of planning conversations with clients it's very much about um you know do you have enough right that's essentially the retirement planning conversation doesn't do you have enough so if you were to have no earned income from today will it last you based on some conservative assumptions the rest of your life i suppose it's the same question isn't it it's like if you can't work from today yes yeah do you have enough and obviously you're going to end up front and loading quite a lot of your spending so if you become sort of very ill say in your early 50s and that essentially precludes you from working for the for the foreseeable then you know your pot not only are you going to have maybe 10 years less building up that part you're gonna have 10 years more drawing off it so i think that speaks to the acuteness of of need that you're talking about earlier on we feel like we're getting it together but actually having a conversation and doing the maths i think would be important yeah i mean you you you probably use the question when would you like to retire and how much you would like to retire on another way of looking at protection is as you said there is could you afford to retire tomorrow yeah because that's if you go ill or if you die prematurely then that's essentially what's happening yeah um do you find that people cancel policies kind of too early a couple of reasons why most people cancel one is affordability is that you know they look at their bank balance and or look at their you know bank account and go oh i'm saying x amount for this what's it for i can't remember why i took that out yeah i haven't died yet or haven't been ill yet so um i'll be fine yeah it's a waste of money um but we're and again i think we're looking at middle age uh you may have taken out some protection when you took out your mortgage typically uh life insurance is that it's never going to be cheaper than it was then because you've got older and a bigger risk so it may be a you know a draw on your on your outgoings probably a small amount if you took it out 20 years ago um but it's never you're never going to get cheaper again and you're more likely to claim on it now than you were then so you know hate to say it but yeah it is you're more likely to need it uh and i think as we enter into kind of our middle age and and so on and so forth i think we may go back to well i'm working i've got my you know death and service cover or life insurance cover with work so i'm covered and i think that too is also it's a great safety net but i like to say you kind of rent that because that only applies when you work for that employee exactly you get made redundant and then yeah and then it's gone or you choose to you know leave and move into some sort of semi or part retirement then that's gone for sure yeah um so we do see instances of people wanting to count or having cancelled um towards the latter part and i think well yeah yeah you know god willing that wasn't a mistake you know i mean it's i mean i've told a story a few times of um i had a couple who were clients and they divorced and he was kind of the link he was actually a mate of mine so um i never really had that much to do with with her and they separated and they had individual life policies 400 000 quid i remember and um we started having notifications that she'd cancel the direct debit and so you know like we're ringing and we're leaving messages and we're emailing did you mean to do this you know please understand you'll lose cover all that sort of stuff and in the end it lapsed and three weeks later she rang back in floods of tears to say that she'd been diagnosed with breast cancer and was there anything we could do to reinstate the policy i had to say no i mean we did try we did get old insurer but obviously they're like there's sort of three or four months grace given or whatever it was um and so you know in there you know i would have done the same i think in in their case it was it was it was cancelled and it was just the worst possible outcome unfortunately yes and and obviously the flip side to that story is i'm sure you've seen countless times is people who take our life insurance and pay one or two premiums and then you know they have a horrible diagnosis and the life has changed but also the finances are fine because the insurance was in place so it's good to see both sides i think um you mentioned earlier on obviously if we as we're hitting middle age we're getting older and stuff starts to go wrong right you know things start to fall off and get a bit more creaky what are the things that will make a big difference when it comes to cost and insurability what sort of uh illnesses or conditions are we talking about the that will really make a difference yeah the ones that really make a difference are those serious condition diagnoses so the likes of cancer um won't necessarily mean that you won't get life insurance but if you're looking at critical ones cover for example then then they wouldn't pay up for that or you may be precluded from that um also smoking and alcohol has a significant impact on the risk but also the cost as well um is that more is that more the case in middle age uh yes yeah well because it's almost that multiplier effect because you've got you're more likely to die at that age than earlier but yeah definitely so uh and that can add a significant amount to to the premium cost um and then uh those are probably the main ones from a life insurance perspective you're looking at income protection quickly on this is more about you surviving or being diagnosed with a condition or illness then it can it can range from anything but those are the big ones diabetes too is well it's a very topical matter increasingly common isn't it yeah increasingly common yeah um diagnosed or diagnosed but quickly you know when it is diagnosed then it's usually actively managed so it is possible to get cover and that's that's something that we come up against a fair amount actually so we just by virtue of demographics We know who to contact and get the right insurance and the right cover for the customer.

24:19Pete Matthew: Which is where, yeah, a good insurance advisor really is worth their salt because it's the sort of thing that, compared to the market, isn't going to be out of place, is it? No, no. Not very well. No, okay. So are there any sort of particular life events, you think, that should trigger people to review their protection cover? What should bring this front of mind for people? uh well there are major life events uh but i think it should it's more than that so your major life events you've got job change uh you may have paid off your mortgage in fact so that's an opportunity to review what what you've got and what you've done um uh family change uh is another one and another is if something's happened in terms of a diagnosis of an illness if it's to yourself then not too late but uh that may limit your choices uh so it's always important to review your cover and we would suggest that you should do so up those kind of life events career change job change even a pay increase or pay decrease even um because even within your existing policies there may be features that allow you to increase cover without having to go for for more go through more questions and more medicals and so on and so forth.

25:38But, yeah, I think it is recommended and reviewed probably every couple of years. Okay. And increasingly what insurers are doing, and we're doing it live search, in fact, and insurers don't want to do it brilliantly, is that we issue annual reminders so people have got an update on what cover they've got, why they've got it, what it's for, and that nudge has anything changed yeah yeah no that's good so it's a prompt for people to think

26:10Pete Matthew: about if anything's changed a reminder of what they've got what what it covers them for and what they're paying for it yeah no that's that's powerful as i mean my next sort of question was going to be when people are reviewing what they've got already what should they be looking out for and what you know what form should that review take so i think you've almost alluded to it there but yeah and i think what is helpful too is that one that you may get your or increasing you i think people will get there and receive their kind of reminders is um and updates is that you know what what have i actually got what is it and it is going back to maybe digging out those policy documents and figuring out what is it it may be live insurance it might include critical illness it might not um what did i take it out for what was it intended for and is that still relevant how's that changed and how much is it and i think it's always worthwhile to then get back in touch with your advisor for a review and you know if you have a protection advisor like ourselves then there's no fee associated with that we'll do a sense check mot as such and figure out in most instances what you've got is fine brilliant well done but if something has changed then there might be something else you want to consider or add or extend okay cool that all makes sense to me so would Just going to, a little bit of a quick fire, sort of true, false, or it depends, if that's all right.

27:37Pete Matthew: Yeah, okay. I will allow you a few more words than that if you feel the need, right? So this is sort of myth busting. These are some of the things that I hear. We've touched on some of them already, but I think this just might be fine. So I've got half a dozen things that people say here. So give me a true, false, or it depends, plus a bit if you want. Once the kids leave home, I don't need life insurance anymore. False. absolutely felt the one uh and as you might know and i do is that they never leave home or they might leave home but the financial dependence still remains um and i think it is that ongoing financial report uh support that that they may need uh and then also you've got to remember you still got your partner to consider as well so the kids may have gone but you've got to look after one another and then what do you want to happen next once you've gone what do you want to pass on yeah yeah for sure uh if you've got a pension pot you're really covered you don't need it false that's it pension pots for pensions right which is for for retirement uh it can provide some access and support but i would well as you know there are some timing issues around that and accessibility issues and it may not be enough and you built that for a particular purpose nice life insurance through work is enough i don't need my own cover uh we touched on this to me false yep false uh good base but more often not people move jobs and if you go self-employed you've got no cover yeah it's too expensive after 50

29:13depends depends i think i illustrated my example there so it depends on what you mean by expense it's not unaffordable uh but then it depends what cover you want how long for how much single people don't need life insurance false and I'm going to I'm going to caveat that a little bit life insurance by saying life insurance also equals critical illness cavern and income protection you've got to look after yourself

29:42Pete Matthew: that's right you asked if you half died that's your point then you've got to rely on your own yeah exactly you asked who's dependent on you and the first answer is you are yeah yeah and then finally stay-at-home parents don't need cover ah uh false yeah we touched on that the value of a mom or a dad or a stay-at-home parent yeah okay so just to kind of wrap up here justin if if somebody's listening to this and they're not sure whether they need cover and they're not really sure maybe even how to start thinking about that what sort of questions should they be asking themselves first a couple of questions one who is dependent on me look around me you know be that financial dependence i'll look down kids look across partner look up to you know the parents then who's dependent on me um and what would i want to happen if I weren't around or I wasn't able to work.

30:48Pete Matthew: Yeah, okay, cool. Good questions. And what would you want everybody listening to this, everybody who's in their 40s and 50s, which is basically the audience. The audience looks like me, right? I'm 51. So what would you want folks listening in our sort of age group to do? What action would you like them to take after listening to this? Well, of course, the natural answer would be come speak to life search but um it's fine by me meaningful money.tv to treat yourselves of course um uh i i think if they've got insurance review it yeah uh it's not i think typically what we see more and more of and yeah actually the regulators picked up on this and their recent kind of market study is that it's not a set and forget net type purchased it's something you've got to review and look at because life changes so that's if you've got life insurance if you haven't got an insurance back to back to question one is uh there will be people dependent on you what would you want to happen if you're not around or you're around but not able to work yeah i'd agree with that i think sometimes we said it quite early on we tend to avoid engaging with this stuff because it's unpleasant to think about but actually the sort of grown-up thing to do is to say okay let's have a bit of a thought experiment what would be the impact if i was no longer around and what would be the impact if i am around but i can't work yeah what would be the financial impact what would be the emotional and you know uh caring for others impact if i can't do that and then we need to think about sort of filling those gaps don't we and yeah and getting help with that yeah okay justin this has been fun and um hopefully it just puts this back front of mind that's kind of what i wanted to do for people so make sure that they're thinking about it um perhaps more than they are so i really appreciate you uh joining me i'm sure we'll do this again before too long and i would just like to say that the the relationship with life search has been brilliant uh for meaningful money more importantly it's been brilliant for uh the clients who i have introduced to you who have universally fed back positively about their experience with life search and so yeah i've been obviously for me reputationally uh it's important if i'm going to introduce uh audience members to somebody i want that to be a good good outcome and it's been without fail uh a really positive thing so i'm really grateful to you and to life search for that so i kind of wanted to put that on the record thank you yeah yeah please do so thank you for joining me justin i really appreciate your time today thank you okay hope you enjoyed that thank you again to justin for joining me uh i really enjoyed the conversation i'm sure we'll do it again uh before too long and um let me know what you think if you've got anything particularly that you want me to ask the guys at life search maybe have a conversation with them about perhaps anything a bit deeper or a bit more specialist then let me know in the comments or you can send an email to hello at meaningfulmoney.tv.

33:57Pete Matthew: But my thanks again to Justin. Back to Q &A with Rog next week. Any links for this episode are at the show notes, meaningfulmoney.tv slash session628. Thanks very much for watching and listening. Like and subscribe to the channel if you're watching this on YouTube. Leave us a review wherever you're listening to this on podcasts and we'll talk to you next time. Cheers.

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