Mortgage protection critical: brokers

By www.theadviser.com.au By: Staff Reporter, 7 June 2010

More than 85 per cent of brokers believe it is critical to offer their clients mortgage protection insurance, new data from ALI (Australina Life Insurance) Group has found.

According to a recent survey by ALI, the majority of mortgage brokers see mortgage protection as part of the core mortgage process, rather than an ‘add-on’ or ‘cross-sell’.

ALI Group head of sales and distribution Darren Smith said most brokers understood they needed to offer mortgage protection during the application process, as this is when they achieved the highest success rate.

Mr Smith believes that brokers most versed in providing mortgage protection are those that respect the ‘duty of care’ that offering mortgage protection gives their customers – that it’s their responsibility to ensure their customers are aware of and understand all the eventualities in taking out a mortgage.

“This relates directly to a brokers’ service proposition,” Mr Smith said. “Brokers focused on ensuring an excellent customer service experience must go over and above simply providing a transaction.”

While many of the brokers surveyed had referral relationships with a financial planner or insurance broker, this did not prevent them from offering mortgage protection.