Protection Update 25th February 2022

Show back on the Road next month, the April NTE, Writing Protection policies into Trust

Hi everyone and welcome to this week’s protection update.

You should have seen that we’ve opened up the registrations for the regional roadshows that will take place in about a months’ time, and then the NTE – which will be live, at the National Conference Centre in Birmingham.

Let’s talk about the regional roadshows as they are happening first.

We’re going with an ambitious 6x locations at the end of March as we really do want to see as many of you as possible.

• So that’s Brentwood in the South East.
• Newport, just outside of Cardiff in the South West.
• The NCC in Birmingham.
• Then Knutsford, just south of Manchester (right off junction 19 of the M6)
• Then Stockton on Tees in the North East.
• And we’re coming up to Scotland where we will be running a roadshow in Edinburgh.

I’ve added the registration links to each of these roadshows so please come along and support these events.

Register for the March Roadshows >>

And then as I mentioned, our NTE will take place at the NCC in Birmingham and the intriguing title is “Reimagine, Refocus, Reignite”.

Reimagine?  Well do you remember what your sales process looked like 2 years ago?  We’ve all learned quite a lot during this last period of time and we’ve all had to reimagine a new normal so that we can function under this unprecedented period of history.

Refocus?  Well, that’s what the NTE is all about.  It’s a celebration where we all join together and that’s something we’ve not been able to do for a while.  And we can refocus on all the things that make us strong, new ideas as we start to look forward.

And reignite?  Well, everything we put our focus and attention into is an investment of time which is why we want to help you reignite you with ideas and focuses for the rest of this year and beyond.

So, make sure you register for the NTE.  We’ve only just launched the registration link this week, but this will be the biggest and best one yet and there is a capacity on the venue, so do book your place and secure it now.  It’s going to be great to see you there.

Trusts this week

Now on Tuesday, I ran the second Trust Webinar which was called “Writing Protection Policies into Trust” and I set the whole thing up with a reminder about what protection is all about.

At the very beginning, it’s about understanding there is a need.  A financial need that would be exposed when something goes wrong.

We can often probe the client by asking a ‘What if’ question.

I can’t work because I’ve had an accident or an illness?

Will your income stop?  Yes, it will after a month

So how will you manage beyond that?  I’ll really struggle and I’ll have to make serious cut backs.

Now you’ll know the solution to a problem like that is Income Protection.

If the client loses their income, it would be a financial problem and we can replace that income with income protection.

We would explain to the client that “If you suffer an accident or sickness that stops your income, this plan will pay you a replacement income until you recover (or up until the end of the term).

Very often, that’s where our thinking gets to – the product solution and how it all works.

But in fact, what about if they actually need to make a claim?  Do we explain what that looks like?

Let me explain how you would make a claim if you needed to…

All you would need to do is contact the life office, complete a claim form.  Once validated, they will pay your income protection benefit directly into your bank account.

I’d say that if you think about that journey, that ends with a good client outcome.  Of course, people don’t want to be making claims on these policies which is unusual.

(I recommend you buy this thing which I don’ want you to ever actually use?)

Critical Illness?

Let’s take a look at another one…

What if one of you suffer a serious or critical illness during our working lifetime or whilst the children are growing up?  If that happened, how would you cope financially?

The client could say “We might need some time out from work for an extended period of time.  I might need to make changes to my home if I am disabled.  I could struggle to continue paying my mortgage.  I wouldn’t be able to pay for any private medical treatment.”

And would something like that have an impact on you and your family?

Yes, both financially and emotionally

Now we know the solution to that situation is Critical or Serious Illness Cover and the way we would explain it’s function would be something like this…

The way it works is that if you are diagnosed with a serious or critical illness, this plan will pay you a lump sum.  You can use these funds for anything you feel appropriate such as those things you’ve just mentioned.

And in terms of making a claim?

Well, what you would need to do is contact the life office, complete a claim form.  Once the claim has been processed; they will pay the lump sum into your bank account.

So again, from recognizing the financial problem which is that suffering a serious illness could have a big effect on the individual and their wider family.  They might need to really rethink the layout of their house or they could struggle to pay the bills… that could be because they’ve lost their income.

That solution fixes that problem and you’ve even identified how the client gets to the position where they can make a claim.

Another good outcome for the client.

But let’s take a look at the most common protection solution of all… Life Cover

Life Cover

What if you die during your working lifetime, the time you have a mortgage, or whilst you have dependent children…Will your income stop?   Yes, immediately

Well, how will your family manage?

After a bit of time to think about this question, the client could say “I’m the main breadwinner, so my family would struggle and I wouldn’t want that.  My loss of income would financially devastate my loved ones”

The financial solution to this one…? Life Cover

Let me explain how it works…

If you die during the term of the policy, a lump sum will be paid out.

That’s the function of the policy and it sounds simple and straightforward.  But let’s think a bit beyond that for a second.

Just imagine that your client asked this question and this is how the conversation went…

How do I make a claim?

You won’t be able to because you will be dead.  Someone else will have to do it. If you have a will, it will be the executor of your estate. If you don’t have a will, someone will need to be appointed.

The client could be thinking… well that’s a bit blunt.  But also, it doesn’t sound straightforward.  What if I don’t have a will?  Who’s going to pick this up?

Can I ask about the actual claim… how long will it take?

Your response… Well, it could take quite some time because the funds can only be paid out when your estate has been settled (that’s called probate and it can take several months to obtain).

What’s the client thinking?

Really?  Isn’t there a way of paying the claim straight away???

Who will the money go to?

It won’t be you because you will be dead.  These funds are meant for someone else.

Again, what is the client thinking?  Really?  I have a very clear idea about exactly who I wish to receive the proceeds.  Why the uncertainty?

Ok, one more question…

Will my loved ones get all the money from my life policy?

It depends… the total value of your estate will be calculated for Inheritance Tax purposes.  Your life policy will be in and amongst your other assets.  This means your estate could have to pay an inheritance tax bill first, which could shrink your life cover payout

Really?  Why would I choose to buy insurance only to potentially pay a large portion of it to the government?  It’s not for them????

What’s your client thinking now about this whole arrangement?

Is this much uncertainty worth it?

The reason I love the topic of trust so much is not only because it’s the right thing to do and it helps clients get what they want; but the big reason why I’ve invested a lot of time into this subject is that using Trusts makes you look like an expert.

It makes you look better than all the other competition who never mentioned it.

We know that a lot of protection business is transacted without financial advice, but we also know that when people buy life policies themselves; they hardly ever write their protection policies into trust.  They just don’t do it.

So, this will give you a real edge and I’m delighted to see that our numbers of new policies being written into trust at point of sale is going through the roof.  It really is amazing so keep up the good work everyone.

We will revisit the topic of trusts later in the year with some more webinars, but if you can’t wait that long, there will be a recording to this trust webinar posted on our Protection Insights page >>

So just remember the key test for anyone with a life policy… 3 simple questions you can ask your clients.

With this life policy, can you guarantee that all the proceeds will be available and won’t be eaten away by tax?

Will the money go to the right people?

And will they arrive there as quickly as possible and not suffer months and months of delays?

Right Money, Right Hands, Right Time!

That’s it from me for another week. Have a great weekend and I’ll see you soon!