HSBC re-writes the protection rule book

HSBC is re-writing the protection rule book with the launch of its LifeChoices plan, a one-stop-shop product that incorporates four key elements of protection and strips down the underwriting process to make it easier for customers to arrange the right level of cover.

New research from HSBC shows that 70 per cent of families do not think they need protection, while around one in five people find applications too complicated. HSBC has developed LifeChoices to address these issues head on.

The four elements of cover available through LifeChoices are:

LifeChoice - level or decreasing life insurance providing a lump sum benefit, with terminal illness benefit included;

SicknessChoice - a monthly benefit paid if the customer is unable to work as a result of an accident or sickness;

TraumaChoice - a level or decreasing lump sum benefit that pays on the diagnosis of one of five serious illnesses or surgical operations; and

UnemploymentChoice - a monthly benefit paid following involuntary redundancy or if the customer leaves work to become a Carer.

The four elements can be ‘mixed-and-matched’ to provide a level of protection that perfectly fits a customer’s individual lifestyle in one product. This is decided during an in-depth assessment by an HSBC adviser who will guide and advise customers through the different levels of protection available.

LifeChoices also includes a vastly simplified underwriting process that has drastically reduced the amount of medical information required on application to ensure customers understand exactly what is being asked of them.

This not only reduces the risk of accidental non-disclosure of a medical condition, but removes the tedious form-filling from the equation. As a result, HSBC expects three-quarters (75 per cent) of applicants to be accepted for cover in a matter of minutes5.

Robert Lang, Chief Executive Officer, HSBC Life, said: “Historically, buying protection has been viewed by consumers as an overwhelming task due to the long and arduous application process. LifeChoices has been designed specifically to make it much easier for our customers to get the appropriate protection for their needs - with the added bonus of getting their cover in a matter of minutes.”

“We have always strongly believed that we have an obligation, in the spirit of Treating Customers Fairly, to offer customers the best protection advice. Provision of cover against death, illness and unemployment is a vital service HSBC offers its customers and LifeChoices allows us to continue doing this in one user-friendly product.”

HSBC carried out comprehensive research to gain an understanding into consumer attitudes to protection in general. The results showed that many people are sceptical of protection products and have a lack of real understanding as to how and why they should be prioritising their protection needs, as detailed below:

alarmingly, 70 per cent of families with children under 16 do not think they need protection;
while around two-thirds (64 per cent) of married couples are also under the impression that they do not need protection;
around a fifth (17 per cent) of respondents found the applications too complicated; and
43 per cent of couples cited current good health as reason why they do not need protection.

Robert Lang continued: “We all know the inherent value of protection, but it is often the last thing we want to worry about when we take out a mortgage or there is another change in our lives, such as getting married or having a baby.

“Through LifeChoices, HSBC hopes to drive away the public’s negative perceptions and restore their faith in protection. It is all a part of our firm commitment to enable our customers to have the right level of protection in place, and LifeChoices makes it easier than ever before”.