Loans play an important role in opening up a security conversation that many may not have given much thought to.
How would their family cope if they or their spouse died, or if illness prevented them from working?
A mortgage is usually the biggest loan most people ever take on. It may be a first mortgage, ushering in a new, exciting chapter of home ownership, or it may mark the next step up the ladder in a growing family home.
Either situation brings a new perspective and obligations, and may increase the desire not only to buy a home but also to live in it for a long time.
Are clients thinking about their broader security needs?
So the loan is the reason for many people to think carefully about protection, either for the first time or to renew their cover to better reflect the ongoing requirement.
It puts the onus on mortgage advisors to spark that conversation and educate their clients, not only about what’s available but why they should do it. Failing to have a conversation is failing the customer and a new mortgage is undoubtedly a great opener.
However, are we so focused on securing the loan that we risk defaulting the customer? Are they thinking about their security needs beyond the mortgage or managing that debt?
A mortgage is only one area that can be affected in the event of a disaster. I highly recommend the CI Expert Critical Thinking Report, which provides food for thought about how much of the security discussion revolves around mortgages.
Perhaps reframing the conversation will help clients better understand that protection should be part of their family’s financial planning
Research confirms that mortgages are a key motivator for taking out cover, with 56% of advisers reporting that planning a new mortgage was the main reason for clients to take out critical illness (CI) cover. But, when asking customers why they didn’t have a CI policy, the biggest response after the cost was that they didn’t need it because they didn’t have a loan.
It is not suitable for the vulnerable
If the decision to purchase an insurance policy is based solely on the loan repayments, will we be fully informed? Do they think about their broader security needs, such as family, future plans and lifestyle?
The idea of only needing to pay off the loan can leave families woefully unprepared and vulnerable. Protection should not be for a hostage but for a person and his family.
When asked why they didn’t have a CI policy, the biggest answer after the expense was that they didn’t need it because they didn’t have the money to buy the house.
Those who hire will equally benefit from income protection (IP) and CI policies. A lump sum payment can be important to help recover from a serious illness and can provide options such as private treatment that would otherwise not be available. The same goes for IP policies, providing valuable coverage that extends beyond the linked term of the mortgage.
The misconception that protection is for mortgage holders is further reinforced when looking at how consumers expect to use the payment from a CI policy. Only 8% said they would use it to pay off their mortgage, while 21% would pay for lost money and 20% would pay for everyday expenses and bills.
Can counselors do more?
Advisers do not prevent clients from the link between security and mortgage. When asked what potential benefits they refer to the most for customers, almost six out of ten say paying off the loan, in part or in full. This suggests that, although the mortgage is the initial incentive, it often remains central to the entire process.
Are we so focused on securing the loan that we risk losing the customer?
It can be very helpful if advisors shift the conversation to features and benefits, and how the policy can support the customer’s lifestyle. Instead of talking more about eliminating the loan, it might sound better to talk about helping protect the family.
The level of misunderstanding of the products is very evident in the report. There are clearly huge gaps in knowledge and understanding of how products can help. There is also very little trust in AI solutions, so the need for advisors is clear in developing knowledge and teaching clients how protection works, regardless of the loan situation.
Bringing protection to life by refocusing on broader benefits, and how CI and IP can build the foundation for broader financial sustainability, may hit home better than eliminating debt.
Advisers do not prevent clients from the link between security and mortgage
Our inquiries usually start with a mortgage, but we make sure to talk about the customer’s needs before we examine and specify the types of products. A mortgage discount should help create a more targeted conversation about what the customer needs.
Perhaps reframing the conversation will help clients better understand that protection should be part of their family’s financial planning, not just a bolt on paying off the loan.
Chloe Davies is head of collateral distribution at L&C Mortgages
This article appeared in the May 2026 issue of Mortgage Strategy.
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