5 TOP TIPS TO SELL MORE PROTECTION! 5 TOP PROTECTION TIPS! AGENDA - - PowerPoint PPT Presentation

5 TOP TIPS

TO SELL MORE PROTECTION!

• Turning water into wine!
• Multi claims - limited benefit plans
• Pay rise on claims
• Sick pay for self employed
• Marketing Protection

5 TOP PROTECTION TIPS! AGENDA

At the end of this session, you will…

• Have some ideas about how to position protection with your

clients, and know how Royal London tools and marketing support can help you and your business!

5 TOP TIPS FOR PROTECTION LEARNING OBJECTIVES

TURNING WATER

INTO WINE!

5 TOP PROTECTION TIPS MORTGAGE PROTECTION

• Which protection product is easiest to

recommend to clients?

• Ok, what type of life cover?

Life Cover Critical Illness Cover Income Protection 1,088,457 537,073 148,498 Mortgage Protection Family Income Benefit Whole of Life Mortgage Protection Family Income Benefit Whole of Life Life cover* Critical Illness Cover Income Protection Source – Swiss Re Health and Term Watch 2019 (The figures above are for protection sales recorded in 2018). *Life cover figure is based on term only sales.

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REGULATORY RISK WARNING

Your home is at risk if you do not keep up repayments on your mortgage or other loans secured on it…

This is important! It’s written on every KFI or Mortgage Offer you issue to clients and it explains what ‘Mortgage Protection’ is all about

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REGULATORY RISK WARNING

Your home is at risk if you do not keep up repayments on your mortgage or other loans secured on it…

My job is to help you buy your home but also keep it should the worst ever happen. Protection insurance has 2 simple objectives: keep your home and maintain your lifestyle!

• How do you explain the objective of Mortgage

Protection and your recommendation? Let me explain how this works…

5 TOP PROTECTION TIPS MORTGAGE PROTECTION

“This plan covers both of you… that means if either

• f you die during the mortgage term, you can

make a claim and pay off your mortgage”

“Ok, so that’s the mortgage paid off…

5 TOP PROTECTION TIPS MORTGAGE PROTECTION

Client 1 £1,500 per month Client 2 £1,500 per month

But how much money would each of you need every month to pay your other monthly bills… what would make you feel comfortable?”

The Solution! A package of protection which is cost effective and ensures they can pay off the mortgage and also pay their other household bills should the worst happen!

5 TOP PROTECTION TIPS MORTGAGE PROTECTION

Family Income Benefit £1,500pm Family Income Benefit £1,500 pm Joint Life Mortgage Protection

MULTI CLAIMS

LIMITED BENEFIT PLANS

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• Royal London Income Protection plan holders with

a ‘full payment term’ plan will be able to make a claim

• Claims are paid after the deferred period
• The claim will be paid for as long as the claimant is
• ff work sick and will stop either when the plan

holder returns to work or the plan expires.

• If the claimant returns to work and suffers a relapse
• f the same condition within 6 months, the deferred

period will be waived and a new claim can be made

CLAIMING INCOME PROTECTION ROYAL LONDON CLAIM JOURNEY

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• Let’s take a look at how this works for shorter pay-
• ut period Income Protection plans
• In this example, we will look at 5 year pay-out

period plans…

CLAIMING INCOME PROTECTION ROYAL LONDON CLAIM JOURNEY

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• Bob (30) has an Income Protection plan with Royal

London

• The deferred period is 13 weeks and his sum assured

is £2000 per month

• The payment period is 5 years and the cover term is

until the end of his mortgage in 35 years time

CLAIMING INCOME PROTECTION ROYAL LONDON CLAIM JOURNEY

What would Bob’s experience be should he ever need to make a claim?

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• If Bob is unable to work due to sickness, Bob must wait his

deferred period (13 weeks) before any IP benefit is paid.

• Bob is suffering from a muscular skeletal condition
• Because Bob has a 5 year payment IP benefit with Royal

London, he has the potential to make a claim for up to 5 years

CLAIMING INCOME PROTECTION ROYAL LONDON CLAIM JOURNEY

Deferred 13 weeks

5 years

Off work sick

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• Bob is off work for a total of 2 years and 3 months and he has

been receiving Income Protection benefit during this time

• Bob has received 2 years of Income Protection benefit
• Bob recovers and returns to work

CLAIMING INCOME PROTECTION ROYAL LONDON CLAIM JOURNEY

Deferred 13 weeks Off work sick 2 years 3 months Income Protection claim

5 years

recover

3 years

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• After 2 months back at work, he suffers a relapse of his

musculo skeletal problem and has to go off work sick again

• Bob can claim for a further 3 years if needed – a total of 5

years

• And, he won’t have to wait his deferred period – instead the

claim will be paid straight away

CLAIMING INCOME PROTECTION ROYAL LONDON CLAIM JOURNEY

Deferred 13 weeks Off work sick 2 years 3 months Income Protection claim recover

3 years

Income Protection claim Up to 5 years

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• Lets say that Bob claimed for 5 years. He then

recovers from his condition and returns to work

• As long as Bob has returned to work for a period of

6 months or more following his previous claim…

• He could make another claim which would pay

Income Protection benefit for up to 5 more years

• This could be for the same condition as before, or

for a new condition

• The deferred period will apply

CLAIMING INCOME PROTECTION ROYAL LONDON CLAIM JOURNEY

Returned to work for 6 months+ Claim for up to 5 years New Income Protection claim

5 years

PAY RISE

ON YOUR CLAIMS

FAMILY INCOME BENEFIT LEVEL OR INDEXED COVER?

• When you apply for Family Income Benefit with

Royal London, you can choose Level cover or Indexed cover

• When you choose Indexed Cover, you can choose a

rate to increase your cover each year by - 2%, %, 3%, 3%, 4%, %, 5% 5% or Ret etail ail Pri Price ces s Ind Index

• Premiums for indexed cover are slightly higher

than for level cover

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FAMILY INCOME BENEFIT EXAMPLE – NOT INDEXED

Term in years Death after 5 years 25

Total income paid = £200,000

Sum assured £10,000 each year

Source: Royal London Personal Menu Plan, October 2019. Client aged 35 next birthday, non-smoker, 25-year term, life cover only. This premium includes a monthly plan charge of £2.60. Figures have been rounded for illustrative purposes.

Monthly premium = £8.50

INDEXATION OF FAMILY INCOME BENEFIT HOW DOES IT WORK?

• Clients will be offered the option to increase cover,

either RPI or fixed rate

• Indexed family income benefit costs slightly more

than non-indexed

• We’ll stop offering the option if a client refuses the

increase two years in a row Let’s look look at the t the si situ tuation tion a aga gain.. in...

FAMILY INCOME BENEFIT EXAMPLE – BENEFIT INDEXED

25 Death after 5 years Sum assured Term in years

Income in final year = £32,251 Total income paid = £422,015 Cost in year 1 = £8.90 each month

(Assumes each increase is agreed as offered)

Income in year of death = £12,155

£10,000 each year

Source: Royal London Personal Menu Plan, October 2019. Client aged 35 next birthday, non- smoker, 25-year term, life cover only. This premium includes a monthly plan charge of £2.60. Figures have been rounded for illustrative purposes.

INDEXATION OF FAMILY INCOME BENEFIT HOW DOES IT WORK?

• The plan holder can choose to not take the increase

to the cover when we write to them each year Let’s loo look at th t the situa situation tion a again... in...

FAMILY INCOME BENEFIT EXAMPLE – BENEFIT INDEXED

25 Death after 5 years Term in years

Income in final year = £25,270 Total income paid = £330,660 Cost in year 1 = £8.90 each month

(Assumes each increase is agreed as offered)

Sum assured £10,000 each year No increases to cover taken

Source: Royal London Personal Menu Plan, October 2019. Client aged 35 next birthday, non- smoker, 25-year term, life cover only. This premium includes a monthly plan charge of £2.60. Figures have been rounded for illustrative purposes.

SICK PAY

FOR SELF EMPLOYED

Bob

• b

50000 50000

Bob

• b

50000 50000

MARKETING THE

NEED FOR PROTECTION

At the end of this session, you will…

• Have some ideas about how to position protection with your

clients, and know how Royal London tools and marketing support can help you and your business!

5 TOP TIPS FOR PROTECTION LEARNING OBJECTIVES

THANK

YOU

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London EC3V 0RL. Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance companies. The firm is on the Financial Services Register, registration number 302391. Registered in England and Wales number 4414137. Registered office: 55 Gracechurch Street, London EC3V 0RL. November 2019 PR P8 PN 0180

adviser.royallondon.com/protection