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The Life Insurance Market
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Matt Morris, our industrious PR manager, has again won the prestigious Headline Money Protection PR Award. Matt won this award last year also, and has picked up a number of other awards on the way.
We're all proud of Matt at LifeSearch and he works hard to ensure that we, LifeSearch, are always presented regularly in the popular and specialist press. The result of his achievements results in an ever growing awareness of the LifeSearch brand and what we do as leading aand award winning advisers for life protection products and services.
Well done Matt!
Steve Bone
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Posted by @
10:56 AM, May 03
10 months i have been waiting for Scottish Provident to make a decision on paying out on the death of my husband.Im sure they wouldnt wait 10 months for premiums.I am continually chasing them to chase up information they have requested.Not good enough when you are having to borrow money for your mortgage monthly.
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Figures for February 2010 released by Protection specialists LifeSearch show that only 3.5% of all protection policies written by the company during this period were bought by young people. This continues the trend seen in the previous 12 months.
Life insurance, Critical Illness and Income Protection are just three protection policies that are less expensive for younger people (age 25 and under), not only because of age, but also because younger people are likely to be healthier, which keeps premiums low.
Yet despite this price advantage young people are not purchasing protection products in significant numbers.
The positive news is that, when young people did purchase, Critical Illness and Income Protection proved popular, with 6.1% of all CIC and IP products sold going to the 0-25 age group, compared with 2.4% for Life Cover, and 3% for Family Income Benefit. This suggests that taking advice is proving to be of particular benefit to young consumers.
Matt Morris, LifeSearch
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Posted by @
09:48 AM, April 27
An excellent point and I suspect there will be a link to housing affordability with fewer and fewer 20-somethings being able to own their own home. This doesn't negate the need for other protection products of course but if they're not exploring mortgage protection then they're likely not to encounter CIC or IP either. There's clearly an awareness issue here which needs to be addressed as well as the wider challenge of affordable housing
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Providers should be offering greater online trust services to encourage the placing of more business in trust.
It would make a big difference and is something that LifeSearch continue to push hard for. Friends Provident are the only life office who currently offer a quick and efficient service with processing times of approximately 1 – 2 minutes.
We all know the importance of trusts and their use in inheritance tax planning, and it’s no secret that not enough consumers take this option. Lengthy paper applications need to become a thing of the past and online systems are the solution for advisers and for consumers.
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Posted by @
04:15 PM, April 23
As well as the obvious financial planning advantages, we also have evidence that the business remains on the books longer if it is written under trust. In these difficult times it should be taken advantage of more and recommended to all suitable clients.
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Posted by @
04:00 PM, April 23
Fully agree, whilst we only distribute protection via bancassurance distribution, we operate on this basis currently and it is one of the key reasons why we write a high % of our cases in trust.
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Posted by @
01:10 PM, April 22
Could not agree more. Life processes are well behind the times - consumers take for granted that they can transact for most things online, so why do insurance companies drag their heels in this particular product area
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Friends Provident paid out on 92.6% of all Critical Illness claims last year, declining just 2.1% for non-disclosure.
The excellent figures show the protection insurance industry continues to prove that they decline very few claims.
Interestingly, Friends Provident say that children's claims now account for the fifth highest reason for claims. The majority (68%) of claims paid were for cancer.
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There have been 6 rate changes this year - Aegon, Scottish Provident (x2), AXA, Legal & General, Fortis.
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Client's needs: the client was looking to protect their income but was unsure how best to do this.
Our recommendation: our adviser recommended Income Protection and, because of our in-depth market knowledge, decided to place them with LV=, who were at that time offering free Critical Illness Cover with each Income Protection policy taken out.
Result: the client was diagnosed with cancer a few months after buying the plan. LV= has paid out under the free CIC policy and she now has money to help her through this tough time.
If you need a Protection case study please contact the LifeSearch press office on 020 7065 1020.
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The adoption of a standard application form that could be used for all insurers would be of benefit to advisers - but with reservations.
Simplifying the process is important but we need to remember that some application forms are better than others and if you are going to standardise the application you need to do it to the highest levels of Treating Customers Fairly.
For example, the Scottish Provident question on smoking gives more leeway than other insurers and we wouldn’t want them to lose their pro-consumer advantage at the expense of standardisation. The danger that we need to be aware of is that the positive differences will get lost through standardisation, but overall it’s a good thing.
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Scottish Provident and LV= have released their claims statistics for 2009 and the figures look good.
Scottish Provident paid out on 91.3% of Critical Illness claims, and just 1.7% of declined claims were for non-disclosure.
For both Critical Illness and Income Protection LV= paid out on 90% of claims while 3% of declined claims were for non-disclosure on both Critical Illness and Income Protection.
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Online processing has come a long way since Legal & General developed their pioneering system nearly ten years ago. It revolutionised the way we processed business. Looking back at what has been achieved, it is now more efficient to submit applications and quicker to get customers on risk. However, have we made as much progress as we could? Unfortunately not.
Friends Provident’s eSelect launch in 2003 was a radical step forward; it offered many new features including offering special terms online, enabling advisers to issue underwriting requirements and, most importantly, eSelect virtually eradicated the need for phone or paper communication. It gave us control from start to finish, with emails sent whenever the status changed. It was an impressive development, but what is disappointing is what followed. Other providers launched and tweaked their systems but for years none deviated much from Legal & General’s original design. Recently, the likes of Bupa, Fortis, Royal Liver and Legal & General have taken inspiration from eSelect and even improved on it, but they are the minority.
However, one crucial customer service point has been ignored. No-one has been wise enough to follow Friends Provident when it comes to online trusts. Trusts are so important, but the process is time-consuming for all concerned because of the paperwork and many clients (and dare I say advisers?) are put off. If all insurers can provide an online trust that dramatically simplifies the process, virtually all clients would make use of it and more families would benefit.
But why stop there? The role of an online system should not cease when a plan starts; systems should enable better management of policies throughout the term. They should provide notifications to the adviser when clients have missed premiums, changed address, lapsed the cover, changed their name, called to alter their cover, made a claim…the list goes on. And they should also enable us to re-instate cover, update addresses and receive updates on claims. It should be an extension of an intermediary’s own client management system, and integrate with it, so that paper communications become obsolete, the need to make calls is reduced and processes become less time-consuming. With ever-more focus being given to improving persistency rates, providers need to develop systems that help intermediaries achieve this.
Some providers are looking at some of the aforementioned features, but from past experience I am concerned that it will be years before we see any real changes. We need investment and innovation, rather than the usual tinkering at the edges. Introducers have differing needs, so the key factor that providers need to build into their systems is flexibility. They need to ensure they can meet the needs of intermediaries now, but also ensure their systems are designed so that changes can easily be made to meet future needs too. So come on providers; please stop delivering online systems that do half the job and instead develop true e-commerce propositions that meet the needs of your customers both before AND after plans are on-risk.
Emma Prescott
Life Office Relationship Director
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