Bernard Buron

Mythbusting Income Protection

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a mystery to many experts, as consumers continue to prioritise their spending on short-term luxuries such as quickly-outdated technology and costly TV subscriptions.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.

A Future Vision of Protection

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.

Mortgage Intelligence Insight: Five great ways for advisers to offer added-value to protection

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.

Critical Illness Uncovered

The need for Critical Illness cover has once again moved into the spotlight on the back of crucial findings from Cancer Research UK. They now predict that 1 in 2 of the UK’s population will develop Cancer at some point in their lives. Combined with the ground-breaking advancements in treatment pushing cancer survival rates beyond the ten year mark for half of adults diagnosed, protecting your clients and advising them on Critical Illness cover continues to be an essential part of your role as an adviser.

Sadly, despite the numbers the UK is drastically under-insured. This month’s Insight into Protection will explore some of the big issues, providing you with some of the facts and advice to raise awareness and discuss protection with your clients. We believe that by working together, we can close the UK protection gap:

What are the Facts?

50% of the UK population will develop cancer

It is still so surprising how many of the general public are unaware of the real numbers surrounding Cancer diagnosis and survival rates. It is a difficult and sensitive subject to tackle, but whether it be through loved ones or personal experience, a large number of us will likely be affected by the disease. Sadly, it can often take a tragic occurrence to make us stop and think, which is even more reason to encourage your clients to approach Critical Illness proactively.

50% of adult cancer patients are predicted to survive 10 or more years

Cancer survival in the UK has doubled in the last 40 years, a clear indication of the steps we have made to battle this terrible illness. It is this crucial fact that will be pivotal to your client protection discussion. This is difficult, as most people instinctively protect material investments such as their home and goods. But they will also want to cover themselves against the most likely scenario, which means given the facts, clients will want to ensure they are financially covered.

UK Households spend just £7.80 a month on medical insurance

According to the Office of National Statistics, under £10 is spent a month per household on medical insurance, compared to £22 spent on household insurance. Research from a top provider also suggests that 5.2 million UK mortgage holders who earn an income have no plan or protection cover in place to cover their mortgage repayments if they become too ill to earn, another reminder of the current UK protection gap.

Why is the UK lacking Critical Illness Cover?

Protection myths

One of the most damaging myths surrounding Critical Illness is that providers go out of their way to ensure they do not pay out on an insurance claim. This could not be further from the truth. In fact, several providers have proudly released figures regarding their Critical Illness claims for 2014, showing pay-outs of over 90%. One leading provider even announced that over half of their 2014 claims were settled within 21 days, with the quickest taking just two days to process. Reasons for the rare instances of non-payment were non-disclosure of medical information and more commonly, instances where illness definition was unfortunately not met.

Consumer reliance on state support, employer or savings

Unfortunately, some consumers believe that the state would cover them financially if they were not able to work for long periods. But state support is there to ensure individuals are not immediately put in a desperate situation, it is not there to protect an established lifestyle and maintain the financial commitments that come with it. Incorrect assumptions on how long employers would provide full pay, or how long savings would last are also common. So take the time to use current figures and calculations to show your client the facts around financial protection.

What can you do as an Adviser?

Prove your credentials

Nobody wants to be scared into buying a protection policy. Use software and applications such as the CIExpert comparison, to show your client the true value of their policy, not just the priced premium costs. LV’s Risk Reality calculator is just one of many useful tools that providers offer, to assist you in the sales process and provide your client with the cover they need.

Recognise the principles of TCF (Treating Customers Fairly)

Ensure that in no circumstance are you placing profit before the client, as this is not adhering to the FCA guidelines on Treating Customers Fairly. Instead, ensure your client has every chance to be fully covered, by providing clear access to all policy options that protect them against any chance of future financial detriment.

Make sure your client is completely covered

Although Critical Illness covers your client in the event of many long term illnesses, there are several reasons why Income Protection, Life or better still, a combination of the three could be more beneficial to your client. So tailor the advice you give to suit your client’s circumstances. There are even flexible protection options out there that include care, support and child protection, providing an even more comprehensive package for your client.

As an adviser, you have a tough job competing with comparison sites battling to offer the lowest premiums. But by beginning the conversation with the facts, proving your expertise and showing you are treating them as an individual, your client can walk away knowing they have been given every chance to ensure they are protected in the event of developing and surviving a Critical Illness.

Five Steps to Boosting Protection Sales

National Protection Sales Manager Bernie Buron wants to help you maximise your protection sales by recommending a holistic approach to offering and selling protection!

Step 1: “Make sure you introduce protection right from the start”

Plant the seeds right from the outset and make your clients aware that not only will you arrange their mortgage and help them buy their dream home, but you’ll also offer them the best possible protection of their lifestyle and their property should anything happen. Let them know it is your job as a responsible adviser to ensure they are given every opportunity to protect themselves should the worst happen.

When asking your clients to gather information such as bank statements and payslips, use the opportunity to inquire about any existing policies they may have, and any sick pay they may receive from their employers. This will spark the conversation you want and get the process of offering them comprehensive cover moving forward.

Step 2: “Make protection-only appointments”

Try and separate the conversations you have with your clients about their needs. This will allow you more time to focus on understanding you client’s protection concerns, what cover they may already have, and what the potential solutions are. An ideal time to have or book these appointments is around the AIP stage. With the mortgage process still in the early stages, the clients will be more receptive to talking about protection in detail, knowing there is a potential mortgage offer coming at some point.

Step 3: “Consider your Fact Find. Make your client’s needs a priority!”

Try and introduce soft conversational questions to get your client thinking about what could or would happen. For example:

“In what circumstances that you could imagine would you lose your home?”

“What financial impacts would mean you are unable to maintain your lifestyle?”

“If anything was to happen to you or your family, what lifestyle would you like to maintain?”

All these questions are designed to get the client thinking about protection. Don’t assume they have considered every situation, as many clients may have misconceptions and a lack of knowledge about the cost, effectiveness and necessity of protection.

Step 4: “Create bespoke protection portfolios”

Simply put: Build trust. No one wants to be sold to, so avoid the hard sell techniques associated with insurance. Instead, empower your clients with the facts, figures and advice thus allowing them to make an informed decision. Talking about protection does not need to only be about selling insurance. Instead, it should be a simple and responsible conversation. Talk to your clients in their language by asking them if they have thought about protecting themselves. They may not have given it much thought, considering that they are in the middle of taking out a mortgage.

Don’t try to be interesting. Instead, be interested in what matters most to them and make sure they understand you are simply being responsible by helping them to keep what they love and treasure. Creating bespoke protection portfolios with menu plans and quotes will show a commitment to caring and responsibility. This can go a long way to proving how seriously you have taken their protection needs.

Step 5: “Think like a dentist! Book follow-up appointments!”

Not every client will take your full recommendation and you may find a majority will only initially take out life cover on their mortgage. But don’t be perturbed by this as it doesn’t need to be the end of the road as far as protection goes. This could be the ideal client and the perfect opportunity to return to the conversation when the client has had time to reflect.

In other words, act like a dentist and look to book in a review meeting. As an example, call it a “protection check-up”, and commit to reviewing their situation in 12, or even 6 months’ time. This will give you the opportunity to discuss their protection portfolio directly with them and highlight gaps in their protection needs and requirements.

Follow these five simple steps and watch your protection sales grow!

Delivering the Whole Protection Package

As an adviser running a busy business, finding the time to have an in-depth discussion with your clients about their protection needs can be a challenge in itself. But we believe that opening up an informed and honest dialogue with your clients about protection is about more than making the most of business opportunities, it is also about ensuring you are providing the right advice to your clients.

Whether you have already begun to make protection a major part of your business plans, or if you have not had the opportunity to think about it properly, we want to ensure you are equipped with the tools and guides to make the next step. Insight Magazine answers two of the most important questions an adviser will ask when contemplating selling protection:

“Why do I need to provide protection?”

To provide the most suitable advice for your clients…

Thoroughly going through protection options with your client proves your credentials as an adviser. Building trust comes from displaying a real belief in the purpose of your protection role: To provide your clients with the insurance advice they need to most effectively protect themselves against possible scenarios of financial detriment.

Looking back over your client base, how often does the client only opt for the protection option directly linked to taking out a mortgage? Protection should become a separate conversation, one that targets a different set of needs. We have an Insurance Recommendation Summary form on our broker website for just that purpose. To work through with your client, this is an important document that is used to evidence the conversation.

To make sure you’re Treating Customers Fairly…

One of the guiding principles of the FCA Sourcebook is for you to: “pay due regard to the interests of customers and treat them fairly’. You have a moral obligation to ensure your client has been given all the proper advice on what you can offer, how they can be covered and how little it can cost. So it’s not just about selling protection, it’s about staying compliant.

One of the most underused questions when discussing protection, is to ask your client whether they truly understand what is meant by: “Your home may be repossessed if you do not keep up with your monthly payments on your mortgage”. This can be a very effective tool to ensure they fully grasp the implications of suddenly being in a financial crisis. After all, your client is looking to build on their lifestyle, the last thing they would want is to go back a step.

To tap into an undersold resource…

The infamous protection gap in the UK is as big as it has been in years, with sources suggesting that it stood at an unfathomable 2.4 trillion pounds in 2014. This is testament to the attitudes regarding insurance for many people, as they prioritise how they spend their money.

But most forms of insurance are there to provide financial peace of mind. We believe that given a thorough and informed breakdown of how they spend their money compared to how much they spend on protecting themselves, many clients might soon change their preformed opinion on their insurance needs.

“What is the best way to discuss protection with my client?”

Empower your client with the facts…

There is no perfect solution to selling protection. But we believe that by equipping your clients with all the information, the tools and the advice to make their own decision, they will have every opportunity to realise how sensible a good protection plan really is.

Start off by asking the right questions: Do they know how the chances of developing a Critical Illness increases every ten years compared with the chances of death? Do your clients realise how lengthy financial processes can be in the event of a family member passing away? Do they know how much quoted premiums increase over time, suggesting a “wait till I can afford it” approach is detrimental to them financially?

But your client will also require hard facts to back this up and reinforce your assertion of their protection needs. Have factsheets and datasheets ready to produce that are catered for their situation, age and household circumstances. Clear infographics and charts are always a great way for clients to take the information on board. This can also include timescales regarding releasing finances, statistics around the probability of developing a critical illness, or current state payments for absence from work. People will always naturally want to protect themselves against the most likely scenario, which means given the facts, many would consider taking a protection policy.

Create a Menu Plan…

This is a crucial element of the protection dialogue you open with your client. Ensuring you always strive to offer the ideal world scenario or the ‘Utopian Version’ of protection is essential in complying with FCA guidelines. We encourage the creation of a comprehensive protection package for your client, where you can break down and individually discuss what each type of cover provides. Make sure you ask the right questions: Do they think they could live on their savings? How long would their employer provide full salary when they are off of work? Are they the sole bread-winner in the household?

This will allow you to segregate your client’s needs, so that each situation is covered on its own. This can then be collated to produce a full protection package for your clients. If possible, produce a professional and thorough family protection document for your clients to take away, in case they do not wish to make an immediate decision. You can always pick the conversation up another time with a follow-up appointment, which is protection-focussed and separate from the mortgage dialogue.

Make use of materials…

Lifestyle planners are another great way to discuss protection with your clients and to create budget margins to calculate expenditure. By breaking down what they spend on each luxury per month, you can work together to cut down on life’s little pleasures slightly, freeing up a surprising amount of money that they can spend on maintaining that lifestyle in the first place. Clients are often taken aback by how much they actually spend, which can open up more conversations around whether they actually need so much of a certain luxury. After all, many clients think about what they have “spare” at the end of the month, not what they have spent in the first place.

Some providers have bespoke toolkits available for downloading on their sites. These fantastic factsheets, planners and guides save you lots of time. There are even digital versions that can be worked through together live with the client. This can use quick calculations to produce financial solutions for your client, providing the most suitable advice on protection.

Mortgage Intelligence Update: Helping to make income protection more affordable for clients

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.

Mortgage Intelligence Protection Update: Total Permanent Disability Explained

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.

Mortgage Intelligence Update: Are your clients’ tenants protected?

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.

Mortgage Intelligence Update: Tax changes open up business protection opportunities

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.