720 likes | 848 Vues
Mortgage & Lifestyle Protection. LV= in partnership with. The next generation of MPPI. Today’s agenda. Introduction: Who are LV=? Protecting what matters most – a short film you can use with your clients Introducing Mortgage & Lifestyle Protection What it is and how it works How to quote
E N D
Mortgage & Lifestyle Protection LV= in partnership with The next generation of MPPI
Today’s agenda • Introduction: Who are LV=? • Protecting what matters most – a short film you can use with your clients • Introducing Mortgage & Lifestyle Protection • What it is and how it works • How to quote • Teleinterviews • The opportunity and materials to market your existing clients
Who are LV=? • The UK’s largest friendly society • Owned by our members with no shareholders • We have almost 2.5m members • We manage over £8 billion of members and customers investments • We insure over 1m homes and cars • In 2007 we paid out £39 million in Life Protection, Critical Illness and Investment claims
LV= Now does FLEXIBLE PROTECTION PLAN LIFETIME + ANNUITIES SAVINGS AND INVESTMENTS EQUITY RELEASE MORTGAGE & LIFESTYLE PROTECTION
A short film about the need for protection
What protection products could John have considered?
Critical Illness? • Doesn’t cover mental disorders (eg. depression and stress) • Or musculo-skeletal disorders (eg. back problems) • But these account for 50% of the £15.2million of income protection claims paid out by LV= in 2007 • Critical Illness is too limited in the benefits it pays out on to properly protect mortgage payments without taking a big gamble Critical Illness cover would not have helped John as he would have had to have been totally and permanently disabled to make a successful claim
Income Protection? • Does provide high quality accident and sickness cover but sells in low volumes, particularly in mortgage market. • Complicated / Time consuming to research (insurer rules widely vary eg. max benefit rules / definitions of incapacity etc) • Difficult concept to market to clients • Underwriting and application process seen as unattractive • Doesn’t include unemployment cover – multiple policies may need to be set up in a menu plan to meet real needs Industry commentators have called for a product with the quality of cover offered by Income Protection, but which is quicker and simpler for advisers and clients
Traditional MPPI / ASU? • MPPI does provide short term cover to homeowners • Can be a valuable safety net against accident, sickness & unemployment • Quick to apply for and usually reasonably affordable • But there are a number of significant issues ….
The issues with traditional MPPI / ASU Only pays out for 12 or 24 months • LV= average claim is for 7 years. Half of people on incapacity claiming 5yrs+ • How would your client pay their mortgage/living expenses after 12 months? John’s accident took place in June 2006 and he is still unable to work as an adviser
Traditional MPPI / ASU? Premiums or terms of contract can be changed with 30 days notice. Contract can even be cancelled with no replacement with 90. • Where is the peace of mind for your or your client? • What about future affordability?
What are the key issues with traditional MPPI? Doesn’t provide cover beyond the end of your client’s mortgage • What if your client became ill or unemployed between the end of their mortgage and retirement? • Your client’s need for protection doesn’t end with their mortgage
What are the key issues with traditional MPPI? Usually has standard exclusions for accident and sickness • May include all pre-existing conditions • May include back problems or stress • ‘Small print’ exclusions can cause client misunderstandings & failed claims In 2002-2003 MPPI cover was sold with around 35% of new mortgages, but by the first half of 2007 this had fallen to just 18% (Council of Mortgage Lenders)
Introducing Mortgage & Lifestyle Protection
Introducing Mortgage & Lifestyle Protection • Next generation of MPPI • Designed to address the issues of traditional MPPI • So you can offer high quality accident, sickness and unemployment cover to people like John • Quick and simple – you can quote and submit in a few minutes • You’ll also be well rewarded for helping protect your client Despite the name, Mortgage & Lifestyle Protection is also available to people like John, who was renting and to cover other commitments!
Tailor cover to meet client’s circumstances • Provide accident and sickness cover with option of unemployment cover. • Completely flexible – cover mortgage (or rent) and/or living expenses • To independent terms if required (cover can be amended in the future)
Long term accident and sickness cover • John’s accident happened in June 2006 - not been able to return to work since • Further major operation means John is unlikely to be able to work until at least 2010 Traditional MPPI • Traditional MPPI usually only pays out for 12 months • John’s benefits would have stopped summer 2007 Mortgage & Lifestyle Protection We pay out until a client is able to return to their own job, no matter how long it takes, whether it takes 3 years or 30 years to get back to work
Best definition of incapacity Traditional MPPI pays out if a claimant can’t do a job they are suited to Mortgage & Lifestyle Protection pays out if a claimant is unable to do their own job. The best definition, and easiest for John to make a successful claim.
Multiple Claims allowed for the same condition Traditional MPPI will usually pay out for 12mths. The claimant can take out MPPI in the future, but their condition may be excluded from future claims Mortgage & Lifestyle Protection will pay out as many times as needed for the same condition over the plan. Meaning John could have had peace of mind that he would always be covered, no matter what recurring or long term conditions he suffers from.
Guaranteed Premiums and contract Traditional MPPI usually has reviewable or age banded premiums Mortgage & Lifestyle Protection has guaranteed premiums. No matter how many claims John made. Meaning John could have had peace of mind over future affordability Mortgage & Lifestyle Protection also has a guaranteed contract – we will never cancel, no matter how many claims are made or economic conditions – unlike traditional MPPI
Other great features • Optional Unemployment Cover (up to 36 mths total, 12 months per claim) • Automatic Waiver of premium • No standard exclusions for accident and sickness • Accident, sickness and unemployment benefit of up to £50,000 p.a. • Flexible for the future & Guaranteed Insurability Options • Homemaker and career break cover • Free Healthy Steps • Extra Care and rehabilitation where appropriate
45 or under • Non manual jobs • Healthy Target audience • Each client will receive a tailored premium, based on factors like age, occupation, and state of health • Available to people outside of these profiles, but cost may be more expensive to reflect increased risk
Choose from a range of premiums • 3mth waiting period: equivalent cost per £100 of £2.35 for accident and sickness • or equivalent cost per hundred of £4.51 for accident, sickness and unemployment • AS cover is long term, premiums and contractguaranteed, & own occupation cover • Max payout for this cover with traditional MPPI is £12,000 • Max payout with Mortgage & Lifestyle Protection is over £300,000
What would the commission be? Up front commission for this example would be around £735 For just a few minutes work Based on 145% Lautro rate (may be higher with some networks)
What is a teleinterview • To keep such high quality cover affordable we underwrite applications • Our UK based, medically trained staff will call your client within 48 hours to complete their application • ‘Expert teleinterviewing’ included in initial call to eliminate GP reports where possible
More about the teleinterview • We will email you with progress to keep you informed • When we have completed the tele-interview, we send a summary to your client • to check and keep • We record the calls and keep records permanently and securely • In the minority of cases where we cannot make a decision, we may refer the • case to a manual underwriter, or obtain permission to write to their GP 64% of clients have a decision within 24 hours.
What are the benefits? • You can quote and submit in a few minutes. We take care of everything else. • No application forms for you or your client – saves time and more convenient • Your client can complete it in the comfort of their own home • No embarrassing medical questions for you to ask • We take responsibility for any non-disclosure – protects you as an adviser • Reduces the need for unnecessary reports so we can get your client on risk more quickly
We pay claims • We paid out £15.2m in claims to people protecting their income with LV= in 2007 • A claim like John’s would usually be paid out within 5 days of return of the claim form More than just a cheque • Where appropriate we may help with the rehabilitation of claimants • With John’s case we may have helped fund physiotherapy to help his recovery • We also provide Extra Care where we feel it will be beneficial
Summary Next generation of MPPI High quality, quick and simple, rewarding Deals with problems with traditional MPPI Long term accident and sickness cover Guaranteed contract and premiums Own occupation cover Optional Unemployment Simple quote and submission with tele-interview We pay claims and help claimants
How rewarding can it be? 1 case £814.84 5 cases £4,074.20 10 cases £8,148.40 25 cases £20,371.00 50 cases £40,742.00 Male non smoker, age 35, £850 per month Mortgage Payment Protection for 25 years £300 per month index linked Living Expenses Protection for 30 years £50 per month premium, Accident, Sickness and Unemployment, 3 month waiting period. would produce up front commission of £814.84 and renewal commission of £1.23 per month after 49 months. (This example is based on standard commission of 145% LAUTRO and may be more if you are a member of a network with enhanced commission.)
Making the most of Protection Marketing Toolkit
Helping you make the most of Protection Mortgage & Lifestyle Protection is a great opportunity for you to revisit your existing book of clients. If you have clients with: traditional MPPI, you can replace their existing cover where the superior protection offered by Mortgage & Lifestyle Protection is more appropriate no protection, you can provide them with new cover from a 5* rated product (source: Defaqto, April 2008)
Reasons to revisit your existing clients Help close your clients’ protection gap Increase your income stream Add value to your adviser/client relationship Differentiate yourself from other advisers with a quality, ongoing service
What is the toolkit? Everything you need to revisit your clients.
What is the aim of the communication? The aim is to get your clients to contact you for a protection review. Remind your client of the importance of regularly reviewing their protection Highlight the risks to homeowners in these difficult economic times Explain new products are constantly evolving, using MLP as an example of a revolutionary new product only available through advisers like yourself Call to action for your client to contact you to for a review , so you can recommend suitable protection (which may or may not be MLP)
1. Targeting the right clients • Each client receives a tailored premium based on age, occupation, sex etc. • We recommend selecting the following clients for your campaign • Cover is available to clients outside these groups, but premiums may be significantly more expensive to reflect risk
2. Targeting the right message • So, we have segmented your clients into a group to target • Next, we can split them further to make sure you get the best response • There are different letters and emails for both of these groups
3. The right method of communication (cont.) • Letter (direct mail) • Initial letter to generate a financial review (two versions) • Chaser letter (to be sent if no response received) • Customer brochure to enclose