Advising on Personal Protection

Question 1

What 4 main areas should an adviser consider protection needs for?

Answer 1

1) Life & Family
2) Lifestyle & Income
3) Home & Contents
4) Business

Question 2

What coverage should be provided for life and family?

Answer 2

1) Life Cover
2) Critical Illness
3) Health Insurance

etc

Question 3

What coverage / steps should be taken to insure lifestlye and income

Answer 3

1) Savings & Investments
2) Accident & Sickness Cover
3) Unemployment / income cover

Question 4

What coverage should be in place for home and contents

Answer 4

1) buildings and contents insurance

Question 5

What coverage should be in place for business?

Answer 5

1) Key person protection
2) Liability (product and public)
3) Partnership / Shareholder Protection

Question 6

What factors shape a client’s needs?

Answer 6

1) Age
2) Occupation
3) Marital Status & Dependants
4) Income and Expenditure
5) Health and Vulnerability
6) Existing Cover / Policies

Question 7

Why does age shape a clients needs?

Answer 7

Priorities change throughout life as life events happen and situatoin changes

e.g. get married or get dependants
take out debt like mortgages
later life - health is more of a concern & inheritance

Question 8

What is the life assurance planning process?

5 steps

Answer 8

1) Identify need for cover
2) Quantify need for cover
3) Determine time horizon
4) Take into account existing cover
5) Make recommendations to fill the gaps

Question 9

Just because need for cover has been found doesn’t necessarily mean cover will be implemented what needs to be taken into account?

Answer 9

The prioritisation process

• quantify and rank the importance of each area of cover needed
• take intoa ccount existing cover

Must take cost into consideration as part of the process

Question 10

What is the difference between restricted and independent advice?

Answer 10

Restricted advice does not offer advice that covers the entirety of the market

Indepdent advice should cover the entire market

Question 11

after identifying the need for cover, what factors should be considered?

in terms of selecting a policy

Answer 11

1) Scope of cover (including term)
2) Premiums Cost
3) Underwriting intensity
4) Quality of Service
5) How often premiums can change

Question 12

How often should a client have a review, what might shorten this time frame?

Answer 12

At a minimum every 12 months

Major life events may require a review sooner

Question 13

What should be considered during a review?

Answer 13

1) Is all cover still required
2) could cover be got cheaper elsewhere
3) what new needs have arisen
4) do these new needs require additional cover
5) is cover still affordable