10 - Personal Protection Flashcards
What are some factors affecting client needs
Age
Marital status
Children
Caring responsibilities
Wills
Occupation
Income and capital
Expenditure
Liabilities
State benefits
How many steps are there in life assurance planning
5
What are the five steps in life assurance planning?
- Identify general need for life assurance cover
- Quantify amount of capital needed if such person dies
- How long insurance cover should last
- Take into account existing policies
- Advisor recommends appropriate type of policy
Life Cover calculator what does it include
Capital needs
Long-term needs
Short term needs
Give 5 examples of capital needs
Funeral
Emergency funds
Specific bequests
Debts and mortgages
IHT
Give an example of long term income needs
Annual expenses for surviving spouse which are likely to last forever
Give an example of short term income needs
Expenditure on children
What factors are usually used to calculate income needs over 5,10,15,20 and 25 years
5,10,14.5,18.5,22.5
What assumptions are used for creating the factors for calculating income needs
Capital will be used up to create spendable income
Annual income will rise by 3% a year
20% deducted in tax
Factors rounded to nearest 0.5
What calculation is used to calculate IP needs
Current expenditure + additional expense from illness - savings - state benefits - income from other sources
What calculation is used for CI
General needs + repayments of loans + pension protection + additions and substitutions for IP
How many weeks do unemployed people have before they receive state benefits on mortgage
39
How can one plan for redundancy
Emergency reserve
Insurance to pay mortgage interest
Flexible mortgage
Drastically reduce expenses
What should an IFA consider before recommending products
Cost
Scope
Uw requirements
Quality of service
Financial strength of provider
