01. Market factors & trends in financial protection planning

Question 1

Regarding frequency & impact matrix, which should be insured against?

Answer 1

High impact, low frequency

Question 2

What are the 2 main events that have a high potential impact on people?

Answer 2

• Death
• Disability

Question 3

Nowadays there are far more ~~ that impact protection needs.

Answer 3

life events

Question 4

What are 2 things people tend to over-estimate when it comes to protection?

Answer 4

• how much the State will look after them
• how much protection they actually have

Question 5

Name 4 reasons why people may not have got themselves protection?

Answer 5

• feeling they don’t need it
• they don’t trust providers to pay out
• too expensive
• don’t understand it

Question 6

Name 3 factors that drive the demand for life assurance for individuals.

Answer 6

• income
• age
• life stage

Question 7

Name 4 factors that drive the aggregate demand for life assurance.

Answer 7

• affordability
• movements in the housing market
• income per head & other economic factors
• if they have dependants

Question 8

What is the formula for the protection gap?

Answer 8

Cover needed - cover already in place through individual & EER policies

Question 9

Morbidity vs mortality, due to advancements in health, greatest risk is no longer ___ but ___.

Answer 9

• dying too young
• living too long

Question 10

Since 2012, no longer possible to charge different premiums for who?

Answer 10

Men & women.

Question 11

What are preferred life policies?

Answer 11

Favoured rated for the active & healthy.

Question 12

Some protection products have been increasingly commoditised because of the introduction of what?

Answer 12

Online portals showing comparative premium rates.

Question 13

What are 2 issues of it becoming easier to buy protection without advice?

Answer 13

• clients buying wrong types or levels of cover
• difficulty of enthusing potential customers to buy without heavy upfront marketing costs