Bernard Buron

National Protection Sales Manager Bernie Buron explains exactly what Total Permanent Disability is, as well as highlighting the importance of understanding when or why claims might not be successful

Claim success for critical illness, terminal illness, income protection and life policies, all boast an average pay out above 90%. Yet according to the Association of British Insurers (ABI), claims for Total Permanent Disability (TPD) in 2015 only averaged 66%. So why, despite the hard work advisers and providers are doing to create clarity and transparency on all types of policy, does TPD fall behind on claim success?

Although most definitions have been universally agreed, which has reduced the number of declined claims, there is still difficulty in proving whether a disability, as the name suggests, is “totally permanent”. This has unfortunately led to claims being made that did not quality for payment. This has cast TPD in a slightly negative light, despite how useful it can be for those looking for the most comprehensive cover.

What exactly is Total Permanent Disability?

TPD is normally an optional benefit which can be added to critical illness cover, if it is not already automatically included as part of the policy. TPD provides a lump sum if your client suffers an illness or injury that leaves them totally and permanently disabled.

Because the definitions of what is a total and permanent disability vary between providers, it is important to understand what situations are covered and which are not.

When would your client be covered?

TPD can often provide cover where critical illness can’t. Normally, providers require one of a certain number of definitions to be met in order for a TPD claim to be successful. This can either be based on the policyholder’s ability to continue their “own” or “any” occupation, or on the inability to perform certain basic tasks, such as bathing, dressing, eating and moving around.

TPD can also cover your client for loss of limbs or sight, as well as if they suffer cognitive impairment. But again, this can vary between insurers so it is vital to check cover options.

What is the difference between “own” and “any” occupation?

Own occupation means your client’s cover is only for their current role. This can often mean a more expensive premium, compared to “any” occupation. An example of this would be a surgeon with “own” occupation cover being able to claim if they lost the use of their hands. However, “any” occupation cover would likely mean they would still have options in the medical industry that do not necessitate the use of hands, such as becoming a general practitioner.

There are some situations where an illness or injury prevents your client from working, but is not necessarily permanent. An example of this might be a temporarily debilitating migraine which prevents them from working, but is very unlikely to be deemed a total permanent disability.

Income Protection as part of your client’s comprehensive cover will greatly improve their chances of always being covered, even if their inability to work is temporary. The most comprehensive cover can deliver peace of mind and protect your client under the most circumstances.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

National Protection Sales Manager Bernie Buron explores several ways advisers can help make Income Protection more affordable for clients

Affordability is still one of the biggest consumer objections when talking about any kind of protection, but income protection in particular is such an underused yet common sense approach to covering finances, that breaking down the affordability barrier is especially helpful for clients.

Helping clients visualise the situation they would be in were they to lose their income is such a useful way to break down opposition to affordability when taking out income protection. Comparing the swift and stress-free claims process with the laboured and unreliable state benefits system can also highlight why income protection is such a good idea. But even when your client has recognised the benefits and the risk a lack of protection can bring, affordability can still remain an obstacle.

So in your client conversation, how can you help your clients work within their budget so that they don’t leave themselves open and vulnerable to worst case scenarios?

Deferred periods can be extended to help with affordability

Extending the deferred period on a policy will normally reduce the premiums, as it reduces the risk of pay-out for the provider. Of course as an adviser your priority is to protect your client as far as possible, which means recommending cover that starts from the moment they are no longer fully covered by their employer. But if affordability is still an issue, extending the deferred period so that your client is at least in some way covered is an option, as long as it is recorded in your client conversations and on your Reason Why Letter.

Budget income protection is a possible option

Clients should always consider longer term income protection first, as this provides the most cover. But there may be circumstances where affordability has become enough of an issue for budget income protection to become an option. This option may also better suit those on zero-hour contracts and agency workers, as their employer most likely has no legal obligation to cover their income if your client was unable to work. Most providers will limit the pay-out time to 24 months.

Menu plans can help tailor protection to your client’s budget

Menu plans are available with most of the big providers and can be a really useful and convenient way to arrange all your client’s protection to suit their circumstances and their budget. Not only do they allow you to mix and match products and tailor protection to your client, but when it comes to claiming, having all their products with one provider can deliver that added peace of mind and convenience at a difficult time. Menu plans can also help advisers discuss options and maximise cover within the ascertained budget. If affordability is still an issue, you can record this and then discuss scaling back some of the benefits, whilst still maintaining the core cover products.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

National Protection Sales Manager Bernie Buron highlights some worrying figures surrounding a lack of protection for tenants

Concerning research from a YouGov poll has revealed that almost five million tenants in the UK have no protection of any kind in place to cover their rent payments if they became too ill to earn for three months or more. This is on the back of recent cuts to housing benefit, which means tenants and landlords are even less protected than before.

According to the YouGov survey commissioned by provider Royal London, over a quarter of tenants know someone who has struggled to pay the bills. But that was not the only surprise the survey revealed. More than a third of those surveyed also said that they had no idea how long they could survive on their savings, with 60% of people admitting they would only survive for three months or less.

Fewer than one in ten tenants in paid employment have even spoken to a financial adviser about their finances. Instead, the most common place they turn to for advice is family and friends. Debbie Kennedy, head of protection for provider Royal London Intermediary, highlighted that a raft of cuts to housing benefit meant that more tenants would not get their rent paid for if their income was suddenly reduced though not being able to work.

Experts predict that the private renting market will increase over the next 10 years, rising to 59% of 20-39 year olds. As the survey revealed that 39% of people would dip into their savings if they were struggling to pay the rent, it is even more important for tenants to protect themselves against the worst case scenarios, as all their hard work saving for a house deposit could be quickly undone.

Kennedy also warned: “tenants who assume that housing benefit will be there when they need it could find the reality is very different … Income protection may be more affordable than people realise and can provide a financial safety net and enable people to focus on getting better”.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

National Protection Sales Manager Bernie Buron takes a quick look at how budget income protection can form an important part of the client conversation.

A lesser-known part of income protection is low cost, or budget, income protection. This option can be really useful for clients to both afford protection, and to match a policy more suited to their circumstances. Although providers vary as to their policy options, they all generally limit the payments to 24 months.

Budget income protection aims to pay out a percentage of your client’s income on a regular basis for a shorter period than regular income protection policies. Because every client would be in a different financial situation as a result of being unable to work due to illness or injury, having flexible protection options to discuss with your clients is a great idea.

Who might need Budget income protection?

Even though most clients would need to consider long term income protection first, there may be circumstances that would be more suited to budget income protection. Affordability may also be an issue, in which case some form of income protection would be better than none at all.

People on zero-hour contracts or agency workers may benefit from discussing budget income protection, as their employer most likely has no legal obligation to cover their income if they are unable to work.

Most providers will continue to provide policy cover after the initial 24 month pay-out period has ended, as long as premiums are still being paid. The policy will continue to be live, and the client can claim again further down the line after an agreed period has ended.

What budget income protection options are there?

Although the maximum pay out time is limited to 24 months across the providers, there are options your client may need to consider when choosing their budget income protection policy.

There are two main types of policy option: deferred period and stepped benefits. Deferred periods are a common way to ensure the policy does not start paying out until they really need it. Having a longer deferred period often reduces the cost of the premiums.

It is important your client brings contracts, employer details and other information to your meetings, to ensure they fully understand when and how their employer would cover their income if they are unable to work.

Stepped benefits, also known as split deferred policies, are a good option that some income protection providers offer. In this case, the policy will provide a lower income after any deferred period ends, with a larger benefit paid after a second agreed deferred period. This can work really well for those whose employer pays a fixed percentage of the client’s income (for instance 50%) for an initial period, before withdrawing income altogether.

As with all forms of income protection, there are several circumstances which are not covered in the policy which you will need to discuss with your client. These can range from redundancy and unemployment to self-inflicted injuries.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

National Protection Sales Manager Bernie Buron looks at whether advisers could be getting more out of administrators and paraplanners within the firm, whilst also highlighting what they generally can and cannot do.

I have had many enquiries from advisers asking exactly what an administrator/paraplanner can and can’t do within an adviser firm. This is an important question to ask, with many advisers rightly erring on the side of caution as to how best utilise administrators within such a tightly regulated sector. But with advisers so very busy at the moment, they are eager to ensure they are getting the most value out of their resource.

I already hear of success stories where the right set up with an administrator can be a godsend to advisers, especially during busy times. But it surprised me that some advisers do not even have an office administrator, and one or two are finding the workload becoming a big challenge.

So what can an administrator/paraplanner do?

Administrators, sometimes referred to as paraplanners, are utilised by a lot of advisers to free up more time to spend with clients. In some cases, opening up the admin role can even be a good way for them to become an adviser themselves through the firm, by learning more about the role the adviser does.

I have spoken to many advisers who have fully ensured their administrators/paraplanners are helping to free up time where possible, which gives the advisers in turn more time to spend with clients and deliver great advice. Here are just some of the ways that administrators have been helping out advisers with their protection, general insurance and mortgage business levels:

Freeing up time by chasing quotes | Handling general client queries | Preparing quotes ready for client discussion | General research on client cases | Calling the protection desk on behalf of the advisers | Underwriting and pre-underwriting | Retrieving and submitting Iress quotes | Chasing medical information from clients to receive the best terms

What can’t an administrator or paraplanner do?

What an administrator should not be doing as part of an adviser firm falls into two main categories:

Advising

Advising would include discussions of appropriate terms, rate type, best lenders, C&I vs IO, suitable amount of life cover, whether it is best to go pure life or relevant life etc. It is important to recognise when a role becomes advisory and ensure this is done by a qualified adviser. This includes certifying documents which must also be done by the adviser.

Fact Finding

Fact finding is slightly more difficult to define categorically, but collecting hard facts (name, DOB, address etc) is generally ok for administrators/paraplanners to do. However, retrieving softer facts strays away from what is allowed. This may include, but is not restricted to, asking a customer their view on interest rates or questioning how they intend to repay an Interest-only mortgage.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

With National Storytelling Week in February, we spoke to appointed representative Caroline Hawkins about her involvement with charity Seven Families, who work to raise protection awareness among the public through telling real-life stories about those who have experienced the hardship of not having protection when it was needed most.

Caroline is an experienced independent adviser specialising in Business and Personal Protection and large loan mortgages. Working at appointed representative Direct Finance Solutions, Caroline prides herself on building long term relationships with clients over time, supporting them over the years with regular reviews and ongoing advice.

We spoke to Caroline about her involvement with Seven Families, the effectiveness of telling stories and the power of protection.

So how did you get involved with Seven Families, and how has it helped you promote the need for protection?

“As a protection adviser I have always ensured I maintain a strong presence not just with my clients but in the industry as well. This includes social media, which is a fantastic platform to get the word out and share stories. It was through LinkedIn, a very good social media platform for professionals, that I was contacted by a representative at Scottish Widows, who said that Seven Families were looking for an adviser who was passionate about protection and raising awareness to look after their seventh family, the Knights.”

“The client, Melanie Knight, had lost her job as a midwife with NHS in 2014 after prolonged absence due to arthritis. She was also diagnosed with Danlos syndrome, a disorder of the connective tissue affecting the movement of joints. Seeing the support of her employer ebb away was a painful process and it is a sad story that tells the tale outside of just the facts and figures.

“As soon as I was on board with Melanie I was able to help her with the life cover she currently had, as her provider offered access to Best Doctors. Often it is the knowledge of products and providers that makes the difference for clients, as they sometimes don’t associate the benefits of their life cover outside of the final pay out. Getting value out of their policies through ongoing support is all part of the service for my clients.”

How and why do you share stories with clients?

“I have my own personal protection story that I sometimes like to tell because it highlights not just the need for protection but also for the right advice. That is why I want to get it right for clients as much as I possibly can, because I know how difficult and stressful these situations can become. Good and bad news stories are important, to show the difference between being without and being with protection just when it is needed the most. The Seven Families story is a great example of this.

“One of the most important aspects of my job is to build long term client relationships built on trust. Not just as an adviser but as a professional friend that they can turn to for support. If a client wants me to find out more about their policy after they have taken it out, or has any other protection questions I always encourage them to call me.

“Stories can have a very powerful impact on people, sparking emotions and helping them to relate to the subject at hand. It is still important to discuss health risks and comparisons with state and employer support, but telling a story that you believe in or is close to your heart can have a real impact on clients, helping them to learn the lessons others have experienced in the past.”

We know that advisers take different approaches to protection. What techniques and formats work best for you and your clients?

“I know some firms prefer to have a protection specialist, or separate the protection conversation altogether. But I believe in letting the client know very early on in the process that we will be having a mortgage and protection conversation. I truly believe in treating customers fairly, and this means knowing your products and the providers well enough to have confidence in your advice and showing that you take it as seriously as any other part of the discussion. For me, it has always been less about selling a product, and more about helping the client protect themselves.”

“Understanding the benefits of each product is also a really important aspect of advice, and I have seen these added-value benefits make a big difference to people’s lives. Knowing which deferred periods are best suited to each client also delivers the best value out of the policy. It is after all a notoriously complicated market, which makes knowledge and understanding central to protection advice, especially as every insurer is different.”

What are the most common consumer objections that you have helped them overcome?

“Misinformation still sticks to the industry and it is surprising how many assumptions about employer and state support are made. Some people are simply not aware how long and painful a state claims process can be compared to a good value, comprehensive protection plan. I often ask clients how reliable they believe insurers to be and many assume it to be around the 50% mark, as opposed to the real figure which is normally above 90% reliability.”

“Sometimes clients just don’t know about protection at all so it is important to bring it up as soon as you can, letting them understand the benefits. More importantly, let them hear or see the real life scenarios that would leave them in a difficult situation, helping to break through the “it won’t happen to me” stance.”

Is it just as important to share stories between advisers and within the industry?

“Absolutely. It isn’t just about raising awareness and talking to clients, it is also about spreading the word and sharing stories between advisers within the industry or network. Whether through social media or face to face networking, I find that stories genuinely affect those I speak to. At networking events I enjoy standing up and speaking about protection, with profound effects on others who come up to me afterwards.

“Attending seminars and events featuring providers is an excellent way to build knowledge around protection, whilst staying up to date with all the latest innovations and changes. If you don’t believe in what you are selling, then clients will pick up on it and be put off. I use CI Expert as well, which is a very useful tool to compare and contrast policies and to talk about protection with clients, helping to find the right “fit” for their circumstances.”

 Do enough advisers embrace protection?

“Many advisers really engage protection and are seeing positive results. But unfortunately there are some that are not as interested. I think this is a worrying trend considering the importance of Treating Customers Fairly. Even Business Protection is not considered enough which can be devastating for the parties involved when not discussed properly.

“Some of it is simply about confidence. If they do not feel they know the insurers and products well enough they might feel they cannot provide the best advice for their clients on the subject. But I believe advisers also have a responsibility to understand the industry and ensure the conversation is fully incorporated into advice. As some advisers simply don’t know how best to talk about protection, I do what I can to spread the word, share advice and most importantly share protection stories where I can.”

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

National Protection Sales Manager Bernie Buron highlights the potential business protection gap that might arise from the upcoming tax changes.

The UK government has announced that as of April 2017 the tax relief landlords were enjoying on their mortgage payments would be phased out over the following years. With the stamp duty changes also coming into effect in April 2016, there has been an expected increase in limited company applications in the buy-to-let sector, as many are looking at their current situation and deciding that applying for mortgages as a business is a preferable option.

This has opened up a world of opportunity for advisers as their landlord clients find themselves facing a different set of business protection needs that can not only protect them and their employees from financial detriment, but make their portfolio as tax efficient as possible.

Limited companies receive tax relief on premiums that they pay for business protection. With your advice, they can ensure their move to a limited company set-up can benefit them whilst ensuring a stable and secure financial future for themselves and their employers.

Although there are different types of business protection, there is one main area that is likely to be pertinent to your landlord clients:

Relevant Life Cover

A tax efficient death in service contract paid to the employer but written under trust for the beneficiaries of the plan.

• Covers individuals such as employees or directors of a business
• Applies to limited companies, sole traders or LLPs
• Premiums can be treated as a business expense and claimed against corporation tax and/or income if sole trader
• Maximum value can be gained from placing it in trust
• Aviva have recently added Critical Illness to their relevant life cover

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

National Protection Sales Manager at Mortgage Intelligence Bernie Buron picks five policy options and benefits that appointed representative and directly authorised advisers can use to offer their clients that little bit extra on their protection policy.

In an unprotected nation, providers are working hard to deliver benefits and extras as part of their policies, to not just reward via discounts and premium reductions, but in some cases incentivise consumers to live a healthier lifestyle. I have picked five policy extras in 2015 that really add value to protection and can help you encourage clients to fully embrace their protection needs:

Friends Life Global Treatment

One of the more unique and bold policy extras, Friends Life Global Treatment sees the provider teaming up with Best Doctors, offering policyholders the chance to access the best diagnosis, advice and treatment in the world. As an additional option on any Protect+ cover, your client or their children can have access to “top medical minds and leading overseas treatment”, if diagnosed with one of many serious illnesses.

Aviva provides access to Grief Encounter

A great example of protection extending beyond simply financial cover, children of anyone covered by an Aviva life insurance policy will receive access to Grief Encounter. This support service helps bereaved children affected by the death of a parent or loved one, deal with emotional issues such as grief, fear and confusion.

Bright Grey’s Helping Hand

Bright Grey believes that to stand out from the crowd, a provider needs value-added benefits at its heart. That’s why they have included Helping Hand to all their menu and relevant life plans. This comprehensive package of third party suppliers (such as oncology nurses, speech and language therapists, bereavement counsellors and physiotherapists), is designed to deliver practical and emotional support exactly when your client needs it.

Vitality Optimiser

An optional extra available to add to all protection plans, Vitality Optimiser offers policyholders rewards and discounts that can, in some cases, reduce their premiums through living a healthier lifestyle. Policyholders can enjoy upfront premium discounts, which drop even further if they actively improve their health over the policy term. This is not including the other discounts and rewards on gym memberships, cinema tickets and travel.

Free Children’s Critical Illness cover with Legal and General

If your client gets critical illness cover with their life insurance policy, then Legal and General will automatically include children’s critical illness cover. Although not unique among providers, Legal and General will also include Child Accident Hospitalisation Benefits, Child Funeral Benefit, Childcare Benefit and Family Accommodation Benefit as part of the cover, making it a comprehensive offering.

If you are interested in joining our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, contact our Broker Support Team on 0845 130 7446, option 1.

Wearable technology is not tomorrow’s world, it’s today’s. The number of wearable devices shipped worldwide in the first quarter of 2015 hit 11.4 million, up by 200% from the previous year. Apple’s flagship watch is becoming especially popular in the UK, as the nation rushes to embrace an era where consumer analysis is king.

But whether actively or passively, these devices have been collecting consumer data for several years now. This has made many insurers take notice and begin to consider using big data to analyse the metrics on their customers, in the way that “black box” recording is having an impact on the car insurance industry.

The simple fact is that there are very few providers left that do not believe wearable technology is soon to have a significant impact on the industry, with many in the process of drawing up business strategies to incorporate these devices.

A win-win scenario

Reducing the risk of ill-health from a consumer’s perspective is always a good thing. Also, because it lowers the risk of claim for insurers, consumers are starting to benefit from reduced premiums and rewards for staying healthy.

Vitality is one of the providers in the UK leading the way in using this new technology as part of their offering. Their honest assessment of the situation: “It costs us less to look after you. So we can pass those savings back”, is the basis of a reward scheme to empower the consumer through logging counted steps, calories burned and attained heart rates.

Big Brother is watching you

Could insurers use registered data on consumers during the underwriting process, at the time of claim or at the point of sale? Sceptics might assume that this will also mean insurers could increase premiums if your data is negatively impacting health. But so far providers are choosing to engage with customers through encouragement and empowerment first, before risking negative media.

Not just the amount, but the accuracy of the data will also need to be carefully assessed, to ensure that there has been no black hat techniques used, such as physically manipulating the devices. These issues will no doubt become more complex and it is important that an honest and transparent approach is taken by both consumer and provider alike.

The beginning of a beautiful friendship

Could this be the beginning of a new, stronger relationship between consumers and providers? Providing consumers with free technologies to monitor fitness and health could help to open up a long-term interactive consumer engagement where rewards and discounts are on offer, especially those that lead towards a possible premium discount.

There is of course still some scepticism as to how much providers could and should utilise consumer data, but empowering consumers with the ability to have real-time engagement with their policies may just be the link that bridges the protection gap in the UK. One step at a time it seems needs to be taken from both consumer and provider, as wearable technology weaves it way into industry view.

The protection gap in the UK remains a mystery to many experts, as consumers continue to prioritise their spending on short-term luxuries such as quickly-outdated technology and costly TV subscriptions. More worryingly, a study from a top provider in the UK suggests that 5.2m mortgage holders who earn an income have no protection cover, or even a plan to get one, to cover their repayments if they become too ill to earn.

It is therefore up to advisers to educate clients on how smart Income Protection cover is. We want to help you mend the protection gap by providing you with the tools to break down the barriers created by assumptions and misinformation.

Here is an overview of three of the most damaging myths surrounding Income Protection and the most effective fact-based weapons to use against them:

Myth 1: It’s expensive…

Income Protection is still one of the most affordable forms of protection and boasts some of the lowest premiums in the industry. As well as affordable, it is also one of the most widely suitable to consumers, who wish to ensure long term sickness won’t cause damaging financial detriment.

Use life and budget planners to show how much your client is spending every month. In most cases, it will dwarf the cost of Income Protection. People are often surprised by the low expenditure of Income Protection policies, so it is worth showing how little it can cost for that peace of mind.

Grabbing the opportunity to talk to clients about the cost of protection is invaluable. A survey by YouGov revealed that the majority of consumers admitted they would turn first to state and charity for support, before seeking financial advice. But the financial support from state and charity would likely only be enough to cover some major payments, let alone bills, food and other necessities.

Myth 2: It’s unreliable…

Despite many providers proudly announcing healthy payout levels, the myth that providers regularly don’t pay on claims prevails. Kevin Carr, chief executive of Protection Review, says: ‘The reality is that over 90 per cent of all claims […] in the UK are paid promptly and without fuss’, with most unpaid claims due to unmet criteria. The PPI scandals in recent years have also not helped matters. Unfortunately, some consumers continue to group Income Protection with PPI, when the two types of insurance are markedly different.

Ensuring your client fully understands how to get the most out of Income Protection is also crucial to its perceived reliability. Choosing a longer deferred period for example can reduce the premiums, especially useful if the employer would provide cover up to that point.

Myth 3: It’s unnecessary…

We have Protection Toolkits on Broker Zone to get clients thinking about the necessity of Income Protection by asking three important questions:

In the event of long term absence from work, how long would your employer pay your full salary?

Some people wrongly assume their employer would continue to pay them full salary for as long as they are absent. But many employers would only pay full salary for up to six months’ absence and are only legally obliged to pay statutory sick pay for up to 28 weeks.

Would you cope on state support?

Currently as little as £57.35 a week, state support would quickly be insufficient to prevent savings being dug into. Despite this, many consumers still harbour the belief that the state would adequately support them during financial detriment.

The process of claiming state support is also surprisingly arduous and entails completing lengthy and complicated documents; something your client could do without during the stress of long term illness.

How long would your savings last if you were unable to pay the bills or mortgage?

We just don’t save enough as a nation, which means for a large number of people savings would not last long if used to support their lifestyle in the event of long term absence. Remind your client how hard they have worked to build up any savings and how stressful it could be to see them dwindle away.