Advisers should work through a client’s cashflow when they claim insurance is too expensive, CommInsure GM Retail Advice Tim Browne says.

“We have found 56% of people cite affordability as the reason why they cannot afford life insurance,” Mr Browne told an Association of Financial Advisers event in Melbourne last week.

“But advisers need to talk to the client about how much is coming in and going out in their budgets.”

He says Commonwealth Bank research shows incomes have risen by 20% during the past five years.

“But during the past three years spending on grog is up 4% and eating out by 11%,” Mr Browne said. “Advisers need to talk to clients about what they are spending their money on.

“A great place to start is talking about their group certificate and argue insurance is affordable based on their income.”

Mr Browne says advisers should also be talking to their clients at the time bonuses are paid and before all the money is spent.

“Do you know your top 50 clients’ expenditure? Advisers need to engage with clients on their income if they are to counter the cost of insurance arguments.”