Four years ago, I arranged a mortgage for a couple in their late thirties. Brian had recently set up a business as a chartered surveyor and his wife Jen had taken indefinite leave from her job to look after their two girls aged five and nine.
I remember walking into their home and thinking “Wow, this is the perfect family.” They were a good looking couple with two well behaved and bright young daughters. Their home was warm, tastefully decorated and cozy. They even had a piano!
I was to arrange a new mortgage so they could move to a bigger house closer to the private schools in Dulwich. Brian was a high earner and they had more than enough equity from the sale of their current home to cover the deposit for their new house. This mortgage was going to be easy.
I however discovered that they had no life insurance whatsoever. Brian’s death in service benefits through work had ceased when he left his previous employer and he hadn’t had time to arrange replacement insurances.
I recommended a package to cover the mortgage, with a separate policy for family protection and critical illness, plus income protection for Brian. It was a big policy and wasn’t going to be cheap. Brian was keen, but Jen wasn’t. Understandably, she was concerned that in addition to the two lots of private school fees they were paying, they would now have a significantly bigger mortgage to deal with. I agreed to return in a week’s time with the paperwork, giving them time to discuss and think things over.
I thought things over myself. If Brian died, Jen, as a widow would have to cope with a big mortgage and two lots of private school fees. She’d have to go back to work, or sell up and take the girls out of private school. Unacceptable. If it happened the other way around, Brian too would be in financial trouble. How for example would his working life be affected looking after two young children?
On my return, Jen was even more hostile than she’d been when we first met but Brian was much more receptive. “Let’s just do it, Jen,” he said. “We can afford it and once it’s done, it’s done.” Jen was adamant that they wait until she went back to work.
The only way to end the stalemate was to take a stand. Risking being booted out the door, I heard myself say, “It would be irresponsible for me to arrange this mortgage without your being covered, so I’m not going to do it unless you go with my recommendations.” After a long, uncomfortable and deafening silence, they signed the paperwork, Jen’s face like thunder. I walked out of there with steam coming out of my ears. I felt like a villain for being so pushy. Jen hadn’t even said goodbye to me as I left.
Eighteen months later, I got a phonecall from the insurance company telling me that Brian had been killed whilst cycling to work. I was shocked. Shaken right through to my boots. How could it be – it seemed like yesterday that I’d seen him, so full of life? And what about poor Jen and the kids? They asked me to present his widow Jen with the enormous cheque they had for her.
A thin, grey and haggard looking Jen met me at the front door. If I’d seen her in the street, I wouldn’t have recognised her. She hugged me and wouldn’t let go. I was moved by her sobbing and wished I could have brought Brian back to her. Instead, I was in possession of the largest cheque I had ever seen and a bunch of flowers. The cheque was big. Big enough to ensure that their mortgage was paid off immediately plus enough to cover school fees until the girls finished university. And an additional amount to live on so Jen didn’t have to go back to work if she didn’t want to. I realised at that point how good insurance is when you need it.
I walked out of there with steam coming out of my ears. This time it was for a very different reason.
Akwasi Duodu, Independent Financial Consultant
Sterling & Law Group plc
