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What if?
This is not a consumer advertisement. It is intended for professional use only and should not be relied upon by private individuals or any other persons.
Learning Objectives
1
What if? Income Protection This is not a consumer advertisement. It - - PowerPoint PPT Presentation
What if? Income Protection This is not a consumer advertisement. It - - PowerPoint PPT Presentation
What if? Income Protection This is not a consumer advertisement. It is intended for professional use only and should not be relied upon by private individuals or any other persons. Learning Objectives Understand the Income Protection market and
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Seven Families Campaign
2
Source: 7families.co.uk
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Seven Families Campaign
3
Their views on income protection
Source: 7families.co.uk
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UK Labour market
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Source: ONS – UK Labour market as at August 2018
32.4 million adults working full or part time in the UK
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State of the nation
5
Source; The Money Charity, May 2018
People in the UK
- wed
£1.576 trillion (Jan 2018). £123,870, the average mortgage debt per household
34% of households are owned
- utright,
28% were mortgagors,
Average first-time buyer borrowed 3.63 times their income
20% households are rented privately 17% were Social housing 304 people a day declared insolvent/ bankrupt. One person every 4 minutes
18 properties
repossessed
everyday -
- ne every
- ne hr 17
mins. 1.70% is the record low savings ratio in Q1 2017 Average first-time buyer loan estimated £140,035
saving 5.5% of the average salary in an average instant access savings account for a year = £2.22 interest after tax
percentage
- f
households with no savings 35%
UK households spend £3.53 a day on water, electricity and gas. 18 properties
repossessed
everyday -
- ne every
- ne hr 17
mins.
percentage
- f
households with no savings 35%
saving 5.5% of the average salary in an average instant access savings account for a year = £2.22 interest after tax
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How many people have any form of income protection insurance?
Less than 5% 1 in 10 Over 33% Around a quarter
3 4 2 1 1 in 10
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Income Protection sales
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Source: Swiss Re Term and Health Watch 2018 Source: Mintel Report 2017
120,094 90,794 96,889 107,302 117,814 121,084
2012 2013 2014 2015 2016 2017
1 in 10 have some form of income protection
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Top insurance purchases
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Source: YouGov poll 2017 Source: Zurich Insurance 06/09/2017
What type of insurance is the most popular? Pet 18% Travel 38% Contents 70% Life Insurance 30% Critical illness 11% Income protection 10% Buildings 57% Motor 68%
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Holistic protection advice
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Is it a product led conversation?
A balanced comprehensive protection conversation with your clients is an important step in ensuring they have the right cover in place to protect their lifestyles However….. The reality is most advisers never get above CIC on the pyramid during their discussions
IPB Lifestyle (STIP) FPIP (FIB) CIC Term
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Holistic protection advice
10
Is it a product led conversation?
A balanced comprehensive protection conversation with your clients is an important step in ensuring they have the right cover in place to protect their lifestyles
Term CIC FPIP (FIB) Lifestyle (STIP) IPB
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INCOME protection
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I don’t need to protect my income
I
Not going to happen to me
N
Can I take it away to consider
C
Off work – never going to happen
O
My savings will support me
M
Employer will look after me
E
What reasons do customers give for NOT protecting their income?
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Consumer attitudes towards income protection
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Source: Mintel Report 2017
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Contingency plans if unable to work
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Source: Mintel Report 2017
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Rely on savings - Deadline to the Breadline
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Source: L&G Deadline To The Breadline research May 2017
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Sick pay from work
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What the state may provide
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Rates correct at April 2018
What do you think?
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www.dwp.gov.uk www.entitledto.co.uk www.turn2us.org.uk
What the state may provide
17
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Income protection claims
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Source: Legal and General Claims 2017
- new claims admitted in 2017 and those already being paid before 1 January 2017
which continued to be paid in 2017
In 2017 we paid out over £1,2 million in income protection claims to our customers and their families.
Don’t trust insurers will pay out – 16%
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Income protection claims
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Income protection
- 1. Cancer
63.8%
- 2. Heart Attack
10.1%
- 3. Stroke
6.4%
- 4. Multiple Sclerosis
5.1%
- 5. Total & permanent
3.6% Disability Critical illness
- 1. Musculoskeletal
35.6%
- 2. Mental Health
21.5%
- 3. Cancer
14.1%
- 4. Neurological
6.7%
- 5. Gastro-intestinal
5.9%
Source: Legal and General Claims 2017
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Critical illness claims
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Source: Legal and general claims report 2017
Average amount £64,925
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The evolution of critical illness
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Critical illness cover today
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Children’s critical illness Extra
Critical illness cover today
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Critical illness 41 conditions covered Critical illness EXTRA increased to 95 conditions covered Nurse support service GP24
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Income protection – Rehabilitation support
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* Terms and conditions apply
Early intervention to support customers on the road to recovery from day one
- Free for all new and existing
Income Protection customers
- Access to a dedicated team of
healthcare professionals immediately
- Full rehabilitation assessments
leading to appropriate treatment advice
- Cost of treatments included*
- Ongoing support reviews
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Income protection – Rehabilitation support
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Visit our Adviser centre for all our sales support material
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Would you gamble?
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Source: * UK National Lottery August 2016 ** Arthritis research UK *** MIND health facts**** Office of National Statistics Family Spending Report 2015
Lottery jackpot win * Suffer with Back pain ** Experience a mental health issue in any year *** Death Happy to take a risk on the lottery with little chance of a payout UK average spend £2.90 a week on gambling ****
45M / 1 6 / 1 4 / 1 Odds On
Take a Punt bookmaker
Todays odds
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Budget planner
27
- Mortgage or rent
- Council tax
- Utilities
- Broadband
- TV entertainment
- Mobile Phone
- Gym
- Food
- Credit cards
- Lifestyle
- Clothes
- Loans
- TV licence
- Car (inc tax &
insurance)
- Savings
- Insurance
policies
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The cash machine
28
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Is income protection too expensive?
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Source: L&G Quote as at 14/05/2018
Customer is aged 35 & non smoker Occupation – Garage mechanic (Class 3) Benefit required £1,500 per month 25 year term IPB Indexation 13 week deferred period Low cost IPB NO Indexation 26 week deferred period £45.88
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What change will lead to the largest reduction in the premium of an income protection plan?
Changing the basis to a LOW COST IPB Removing INDEXATION ALL 3 have an equal effect Changing the deferred period from 13 weeks to 26 weeks
3 4 2 1 Change to a Low cost basis
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Is income protection too expensive?
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Source: L&G Quote as at 14/05/2018
Customer is aged 35 & non smoker Occupation – Garage mechanic (Class 3) Benefit required £1,500 per month 25 year term Customer is aged 32 & non smoker Occupation – Retail buyer (Class 2) Benefit required £1,000 per month 28 year term IPB Indexation 13 week deferred period Low cost IPB NO Indexation 26 week deferred period £45.88 £17.79 IPB Indexation 4 week deferred period Low cost IPB NO Indexation 13 week deferred period £39.22 £9.72
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Income protection is evolving
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Linked claims Continuous cover Hospitalisation benefit Stepped Benefits Income Guarantee Proportionate Benefit Low cost Life cover
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Learning Objectives
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Understand why is it essential for anybody who relies on an Income to have it protected and the ways to help a customer also understand this. Understand the Income Protection market and the opportunity for advisers in this market to help their customers take protection Demonstrate how to bring the benefits of income protection to life and identify a clients needs through sales support tools.
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Support from Legal & General
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Support from Legal & General
35