LifeQuote's Intelligent Protection lets advisers calculate quotes based on clients' insurance needs and outgoings, writes the firm's managing director, Michael Ward
The recently launched Intelligent Protection from LifeQuote is a software package aimed at offering advisers a quicker and more client-friendly plain English protection recommendation as well as providing a comprehensive suitability template text for the adviser to personalise.
The quotation tool has been designed not to ask the users what type of policy they want a quote for. The idea is that the adviser tells the system about each client's circumstances and the system recommends which insurance options would be appropriate for each client.
It is a sort of "expert system" for protection writers. It is not designed to replace an adviser; in fact, it is absolutely crucial that there is an adviser to help the client through their protection options.
The system can be accessed by visiting www.lifequote.co.uk and clicking on the "Intelligent Protection" link.
Advisers need a username and password. A 28-day user account can be accessed for free by any insurance adviser.
First, advisers need to decide whether they are going to advise clients as single or joint applicants.
The client input screen asks all the data found on a typical protection factfind, including the applicants' dependants, occupation and household expenditure details.
Importantly, the software also asks the adviser to confirm how long clients can support their outgoings in the event of ill health or redundancy.
These periods are used to help determine the deferred periods for the health and unemployment insurance options.
The next screen then validates all the protection "risks" that are likely to concern the applicant. The dialogue box at the top lists the risks in plain English. These include "paying off the mortgage if you die" and "paying your children an income if you die".
Plain English
The system does not use insurance terminology; it sticks to plain English.
It talks to the applicant in language they would use to describe the needs they have for insurance. In this way advisers can achieve a level of applicant buy-in that is far more difficult to achieve using phrases like "income protection" and "family income benefit".
This screen is a critical part of the advice process as it is where applicants must prioritise their needs or tell the adviser they don't need to have a particular risk covered.
So, for example, if the applicant confirms they don't have any interest in unemployment cover for their mortgage payments, this option should be highlighted in the top box and the "DECLINE - Not Required" button clicked.
This will move the unemployment option into the correct box below, indicating that the client has declined this cover without viewing a quote.
Likewise, the options should be re-ordered into the client's priority order.
This is done by highlighting the benefit that is to be moved and using the up and down arrows on the right to move the benefit.
Once all the benefits have been sorted into priority order, the adviser needs to ask the client to confirm the budget they can afford for their protection priorities.
It is important that this is put into perspective compared with everything else they pay for in household expenditure - for example, if they can afford £42.50 for a full Sky package, can they afford £40 for their family protection insurance?
Our experience is that once this budget is discussed and set it ensures advisers will generate higher value sale. The system has up to eight built-in insurance risks per life, depending on the circumstances.
This could lead to a theoretical maximum of 15 benefits per life - but this assumes nine others are dependent on the life assured.
The descriptions are self-explanatory, with the exception of contingency critical illness (CI) which is worth a mention.
Cancer drugs
Experience shows that many more customers aspire to purchase CI protection than actually do, as many are put off by the high cost compared with life only cover.
Furthermore, awareness of the benefit is increasing as stories of cancer drugs being unavailable on the NHS emerge almost every day.
So contingency CI benefit is designed to provide a smaller amount of independent CI (the default is £20,000), which might help the client in such circumstances but which should not break the bank at outset.
Contingency CI benefit can be added to most plans for less than £20 a month. The sum assured and term can be amended to tailor it exactly to the client's wishes.
The system will compile a series of multi-benefit quotes with each including the next risk specified by the applicant.
The tool can be used to confirm which risks can be covered within the applicant's budget.
For an applicant with a £40 monthly budget these may include repaying the mortgage on death; providing protection for the mortgage repayment in the event of long term ill-health; providing an income to the applicant's child dependants on death; and providing an income to the applicant's adult dependants on death
Clicking on the details tab brings up a detailed plan summary. Within this dialogue box the specified insurer can be changed as personal preferences dictate.
The system works out what the sums assured could be, based on a formula that is linked to the applicant's income at death.
The terms of the benefits included are designed to provide the income for the period the applicant confirmed the dependants still relied on the life assured.
The software takes the most expert view of what best practice should be and gives all new business writers the opportunity to experiment and create their own solution.
From the results screen the adviser can get a rough estimate of what each benefit costs. Using the back arrow the adviser can then reprioritise with his client the benefits to obtain the best value for the budget available.
Also from the results screen the adviser can edit the sums assured, terms and deferred periods on a wide range of the insurance risks and over-ride the system defaults if required.
Advisers have total flexibility to build any benefit options they wish.
So, once the options have been finalised, the adviser confirms the details and has all the documentation necessary to proceed.
Advisers need to choose to complete a LifeQuote Express Underwriting form in which LifeQuote will complete all the lifestyle and medical questioning, freeing the adviser from the risks associated with non-disclosure, or the adviser can choose to take the illustration straight to the extranet for the insurer concerned.
What all advisers will require, however, is a suitability text to issue to their applicant within five business days of having started the transaction, and Intelligent Protection can create a tailor-made template.
Chosen options
The suitability text is designed to be accurate and complete. It reiterates to the client everything they told the adviser and goes on to detail the protection choices made, along with the premiums for the chosen options and those that were outside the budget, to avoid any misunderstanding later.
The text is light on formatting and style so it can be easily copied and pasted into advisers' workspace and personalised to their own trading style.
Research indicates that Intelligent Protection has significantly increased the protection income of all those advisers using it. Some advisers are quoting an increase of 79%
in their new business commissions, and all advisers feel more comfortable with the structured suitability text Intelligent Protection creates.
Michael Ward is managing director of LifeQuote
The lowdown
• Intelligent protection uses one underwriter for each life assured.
• It is programmed to watch for joint life events that might be more compliant written as a joint life, first event policy and will flag this and offer a comparison when appropriate.
• The system only offers reviewable rates for unemployment benefits.
• It costs £19.95 for up to three advisers a month, and is free if one or more pieces of business are placed with LifeQuote.
