Cost-savings are only truly made when allied to a high-quality product. So what help is available for advisers to assess products in a sensible manner? Ian McKenna explains the technology.
There are obvious examples, such as own occupation wordings for income protection and the extent of critical illness definitions. But the difference in cover in other areas can be far more subtle. It is important to help advisers to match specific features to individual clients’ priorities and circumstances.
Some suggest that pure life cover product features are less relevant, in practice this is far from the case. Half of the life offices in the market include bereavement counselling in their premiums.
The actual difference in cost can amount to just a few pennies, but by definition, anyone taking the trouble to set up life assurance will almost certainly value such advice for their loved ones if a policy needs to pay out.
Equally, some clients may particularly need greater flexibility in their life cover arrangements. For example, if a provider is perhaps just a couple of pounds more expensive but will allow far greater future options, does this contract represent better value?
In the case of critical illness cover, it is also worth considering if reinstatement of cover is allowed post claim. A wide range of different product features are available on various income protection plans for example can the policyholder pause cover for a career break? Half of income protection providers in the market offer this feature, but some will provide this only for one or two years, while others will offer a career break of up to five years or more.
Return-to-work counselling can also play a huge role in mitigating the long-term effects of a serious illness. Where plans offer this option, claimants frequently return to work far more quickly which, in turn, can significantly reduce the impact on their long-term career and lifetime earning potential. Seen against this background, there must be serious questions to ask if just price comparisons are genuinely in the client’s interest.
Dedicated product research comparison services can be a huge help to advisers. Capita’s Synaptic Protection Research system is designed primarily to help the adviser produce a compliant suitability recommendation, showing that consideration has been given to a wide range of issues, such as: writing the policy under trust, does the client want waiver of premium, should premiums be renewable, guaranteed, level or indexed? Then it considers the different premium options, such as exclusions.
