Protection Update 22nd October 2021
Protection update 22nd October
Hi everyone and welcome to this Friday’s protection update 22nd October.
Legal & General CO1P
Legal and General are introducing some changes which will kick in next month and this will affect how they pay commission and they are calling it CO1P – or collection of first premium.
Currently the way Legal and General pay commission is in advance of the collection of the customers first premium payment. In some instances, that payment can be made within a couple of days of the risk date being confirmed.
Legal and General say they are making this change in line with many other insurers which is to pay the commission once they have received the first premium.
The new system will effectively instruct the bank to establish the direct debit and then pay the commission once the direct debit has been activated and the first payment is made.
Legal and General have been proactively contacting advisers about these changes over the last few weeks so you should already be aware of these changes if you are a supporter of Legal and General.
iPipeline / SolutionBuilder down this weekend
I wouldn’t normally advertise every communication about provider systems being taken down because these are usually in the middle of the night or at times when most people wouldn’t use them.
But just to let you know that this Sunday 24th October between 09.00 and 13.00, iPipeline will be carrying out a Disaster Recovery Test (DR) on all iPipeline products and services.
That means if you wanted to do any work on Solution Builder this Sunday morning, you won’t be able to because you won’t be able to log in.
From 1pm, the service should be all back up and running and return to normal.
Risk Probability for Protection?
Now this week, we ran our final Better Sick Pay Schemes workshop of the year which was all about the need for a better sick pay solution for so many people – and that means income protection.
Now there was a bit in the workshop where we took a look at risk probability of things happening and the way I positioned this was by comparing the chance of something happening in the public eye versus the chance of a claim on an income protection policy.
This is because there’s a point at which someone is going to sit up and take notice about the chance of something happening when the numbers become significant.
Well, one of my examples was the chance of Steve Bruce (manager of Newcastle United) leaving his post before the end of the season…
The statistical probability and books odds were really high – around 95% or in betting terms; 1/20.
Well, it was quite strange that we didn’t even get to the half way point in the protection workshop and; Steve Bruce left Newcastle United.
I guess it was an inevitability.
But when you look at some of the income protection claim examples; we had Fiona, 31, non-smoker. Retiring at 70. She carried a 48% chance of going off work sick for 2 months in her working lifetime.
We looked at another example which was Sally, 25, a smoker. Retiring at age 65… she had a 47% chance of going off work sick for 2 months or longer during her working lifetime.
And finally, Tracy a female smoker age 55. We looked at the odds of her going off work sick for 2 months or more in the next 5 years. What were the odds?
They were around 11% which isn’t particularly high, but it is when you start looking at the most likely protection sale which is life cover.
So the call to action is whether you ever use risk probability in your protection conversations.
My personal favourite is the LV= risk reality calculator. It was the first in the UK protection market and its simple to use. Just go to riskreality.co.uk/trm and create your own risk report… you might be surprised by what you see.
Protection Insight – National Friendly
Now this week’s protection insight podcast is with a life company which is probably not very familiar to many of you.
It’s National Friendly and I caught up with John West a few weeks ago to talk about their quite innovative ‘Accident Only Income Protection’ cover.
Its certainly a bit different but you’re going to be able to use this as an income protection solution for those clients who just find it difficult to get cover elsewhere.
They might have been priced out of the market or they could have other issues which means conventional income protection just isn’t possible.
Take a look at the podcast and see what you think.
I think it’s great that these types of innovations are happening with protection products because it just gives you more options as the adviser, and it give your clients more opportunity to get cover.
So, if you’re picking this protection update up on Friday afternoon; I will actually be attending the Protection Guru awards down in London and we will know shortly how we got on in the 2 categories were nominated in. Best Network for Protection Advice and Best compliance function for the DA club.
I’ll obviously report back next week, but to be recognized something like Protection Guru and shortlisted to just 3 final candidates is an achievement in itself.
So, with that, I’ll sign off and wish you a great weekend!
Speak to you soon!
