Case Study: “I don’t really know what we have, how can you help and if so, how much will it cost?”

Enquiry:

I received a call from Mary, a potential new client, asking me how I could help her and her husband to understand their current cover and pension provisions. She stated she had a mortgage protection policy but wasn’t sure exactly what this covered. She remembered her partner (Peter) taking out an insurance policy which included some illness cover but didn’t remember exactly why they had the policy. They both had various pensions with different companies and employers and she wanted to see if it would be worthwhile merging them.

Cost:

Mary hadn’t previously used a broker so was a bit apprehensive. “Before we go any further, what is the cost for you to review our policy’s?” I responded with “If you are happy for me to be your broker on these policies, there is no additional cost for you.” Mary: “But how do you get paid?” Me: “In many cases a broker’s fee is included in a policy whether you use a broker or not. You can request a fee-based charge which I can calculate based on work required but this will not reduce the cost of your existing plans.” In short, most people prefer to pay through fees paid direct from the pension/life providers.

Information gathering:

Mary asked me to investigate their policies and I informed her that if both partners simply sign a document entrusting me as her broker, I could obtain all the information required to review her policies. Mary asked if this would change her policies in any way or cost her more money. I reassured her that this just allowed me to discuss her policies with the companies but that it did not authorise me to make any changes or give any instructions that would impact these plans. I emailed this one-page document to Mary and they both signed and returned it to me.

Meeting:

I met with Mary and Peter following my review and was able to outline the exact cover and pension savings they currently held, along with the pro’s/con’s to making changes or leaving in place. They informed me of their priorities and as their children were in their teens there wasn’t a necessity for as much life assurance, so they decided to direct more of their funds towards their pension.

Peter had become a non-smoker, so a cheaper price or more cover for the same cost became available to him. Mary had the option to combine two pension plans, however she was better off moving it into a pension bond in her own name. If she had chosen to combine, she would have lost a tax-free lump sum option that was unavailable in her existing employers pension plan.  

Second Opinion?

Being diagnosed with a serious illness would be an emotionally overwhelming experience if it happened to you. You would have lots of questions: What will happen now? Is the diagnosis correct? Will the treatment be right? How can I be sure? Now, there is someone to help you answer these difficult questions. The result could save your life. If you or a loved one were diagnosed with serious illness, Aviva Best Doctors - Second Medical Opinion can help.

What is Best Doctors - Second Medical Opinion and how can their service help?

  • Best Doctors - Second Medical Opinion is a global organisation which brings the world’s leading medical expertise to you and your family offering a second opinion when you need it most.

  • Best Doctors - Second Medical Opinion has a unique and well-renowned network of over 53,000 peer reviewed medical professionals. Having such expertise at their fingertips and supported by a truly caring service team, is the reason why thousands of people around the world turn to Best Doctors - Second Medical Opinion when they need it most.

  • Best Doctors - Second Medical Opinion can help you with those questions that are likely to be racing around your mind if you were diagnosed with a serious illness.

An in-depth review of your medical files will be conducted by a Best Doctors medical specialist to help verify your diagnosis and treatment options. The process can reduce potentially serious complications that can result from a misdiagnosis, and help you and your treating doctor determine the proper course of action.

But Best Doctors - Second Medical Opinion isn’t just for serious life threatening illness. You can use the service for any chronic or troubling ailments affecting quality of life. For example, sports injuries, skin diseases, cancer, blood diseases to name just a few.

This feature is available at no additional cost and Aviva will match the lowest market price available for the cover. It can even be used for conditions diagnosed before you took out your Aviva policy and is available with the following Aviva protection policies.

  • Term Cover

  • Mortgage Protection

  • Specified Illness Cover

  • Personal Income Protection

  • Executive Income Protection

  • Pension Term Assurance

Terms and conditions apply. If you currently have a Life Assurance policy and wish to review your cover, it’s worth consulting a financial broker.

The Benefits of Serious Illness Policies

Most of us do not like to think of how we would manage financially should either a spouse or child become seriously ill. Fortunately there are various options available when it comes to protecting yourself and your family and it can be an important addition if you have no health insurance cover in place.

1.    Standalone Serious Illness Cover
This is simply a Serious Illness plan without life cover. This type of policy is suitable should you have no dependants.

2.    Life & Serious Illness Cover
This plan provides you with both life cover and serious illness cover. If a serious illness claim is paid, the life cover amount remains the same. If you should die during the term of the policy, the life insurance cover will also then be paid out in full.

3.    Life & Accelerated Serious Illness Cover
As with above, this plan provides you with life cover and serious illness cover, however, if a serious illness claim is paid on this type of policy, the life cover amount is reduced by the serious illness pay-out amount. However, if you should die without having made a serious illness claim, the full life cover is paid.

The benefits can vary amongst the different life companies, but most will include the following:

Free Children’s Cover
It is important if you do have children to check this with your life company, as they may be covered for all of the illnesses listed on your policy, and sometimes for other child-related illnesses, such as meningitis.

Waiting list and overseas surgery benefit
Under this benefit the insurance company pays out part of the serious illness benefit, if you are put on a waiting list for certain major types of surgery, or if it is essential for you to have major surgery outside of Ireland.

PTD Benefit                                                                                                                                                     If you become permanently, totally disabled (PTD) from an illness, or condition that is not otherwise covered by the policy, you could claim the serious illness benefit cover under PTD.

The two types of PTD cover are: 

Any-Occupation PTD – you can only claim if you are not able to work at any job. It means you are permanently unable to do many normal daily activities, such as walking, lifting, bending, writing, or speaking.

Own-Occupation PTD – you can claim if you are permanently and totally unable to do your current job. You will usually pay extra for this type of PTD cover. You may not be able to get this extra cover, if your job carries a higher risk of disability. For example, if you are a sports professional.

How would you pay your mortgage and bills should your income stop?

One in four Irish workers worries regularly about loss of earnings due to illness or injury.

Being unable to work and provide for their families due to illness, injury or death is a significant worry for Irish workers. Over a third worry about it at least once a month, while 13% said it was on their minds on a daily basis. Despite this anxiety, we are more likely to insure our pets and our gadgets than we are to insure our ability to earn a living. That’s according to research recently carried out by Red C on behalf of Aviva.

Only 6% of respondents said they held Income Protection insurance, even though, overall 85% admitted they worry about the prospect of illness or injury preventing them from providing for their family.  More than three in five said they were concerned about mental illness keeping them out of work.

Asked how they would manage in the event of being unable to work due to illness, injury, or death the vast majority (62%) said they would rely on social welfare. Yet half of all respondents had no idea how much they would be entitled to if they were unable to work and only 17% could quote the exact amount of the state disability benefit, which currently stands at €230.31 a week. One in four said they would rely on their savings in the event of ill-health: the survey found that average annual household savings amount to under €6,000.

Researchers also found that almost a quarter (22%) of Irish adults have experienced a significant loss of income due to illness, injury or death of a main breadwinner. A third of those affected by such a loss got into debt and another third had to move out of their homes.

Among the minority who have Income Protection insurance, almost 70% bought it themselves, either through a financial broker or directly from an insurance company. Just a quarter said their insurance was provided by their employer.

Life Insurance pays out a fixed amount, so it's the ideal way to help give your family a financial safety net if the worst were to happen.

Income Protection Insurance is there for you when your income isn’t.  It can help safeguard your lifestyle by providing you with a monthly income, should you be unable to work for a period of time, due to illness or injury.

Funeral Payment Helping Hand

The death of a loved one is always a traumatic time. But, in the midst of the grieving process, a funeral needs to be arranged and ultimately paid for. This is done by means of a grant of probate. This process can take a long time to complete. In such cases, the probate process must be complete before a full claim is paid. Research indicates that, on average, it takes 489 days to receive a grant of probate in Ireland.

This could cause a significant impact to your family’s financial position during the intervening period. This means that even though you have taken positive measures to protect your family financially, if you were to pass away there may not be immediate funds available to pay for a funeral.

A leading Life Company has introduced a feature which can help to bridge that gap. The company will pay for Funeral Director costs where they accept a death claim but payment is delayed due to probate. They will pay an advance payment of the cover in place, up to the value of €10,000, to cover Funeral Director Costs. The Funeral costs will then be deducted from the lump sum the policy will provide, as soon as a grant of probate has been achieved.

The Payment

This advance payment is only available to cover costs from Funeral Directors, which can include: a coffin, burial costs, church fees, cremation, death notices, plot, services of Funeral Director, e.g. hearse/car.

The payment will be made to the Funeral Director directly or to the Executor(s) of the estate. Brokers and Executor(s)/Solicitors acting on behalf of the family will be notified of this payment once it has been made. This feature is limited to death claims and only covers Funeral Director costs up to a maximum value of €10,000.

How can my family avail of the Funeral Payment Helping Hand?

  • They can make contact with your Financial Broker as soon as possible and where probate may be an issue or delayed, your Broker will explain the policy and make contact with the Life Company on your behalf.

  • The Funeral Director’s invoice or receipt will then be required.

  • Payment will be made to the Funeral Director directly or to the Executor(s) of the estate.

  • The Broker will let the relevant people know, e.g. Executor(s)/Solicitors, once the advance payment has been made.

Life Assurance That Guarantees Cashback

The primary benefit of Life Assurance is to financially protect a family in the event of a death. When deciding if you need Life Assurance the kind of questions you should consider:

  • How will my family adjust financially if my partner or I die?

  • Will my mortgage be paid off?

  • Will my loans be paid off?

  • What sort of lifestyle will I be able to maintain?

  • Have I appropriate provisions in place long term?

  • Would I be able to afford to not work for a period of time?

In most cases, Life Assurance has a set amount of Life cover and a set time period. The average Life Assurance policy is cancelled within 8 years which means that many people will be taking out a new policy and will not receive any benefits from their current plan. There is generally no value on these policies unless you are making a claim.

A Life Assurance company has recently introduced a Whole of Life cover that offers you several options once you have passed 16 years. Once you have paid into it for this term, every year thereafter you will have an option to continue paying, encash the policy (receiving 70% of your premiums back) or stop paying for the cover and you will maintain a specified amount of Life cover forever.

Here is an example for a person who is 45 years of age, a non smoker who takes out €100,000 Whole of Life cover. The cost of this would be €111.66 per month (half the cover would cost roughly half the price). Let’s imagine they are retiring at 65 years of age, so they have paid into this plan for 20 years at that stage but they want to know what options they have at that time:

  1. Change Nothing:  They can continue paying this policy. The premium will always be €111.66 and the Life cover will remain at €100,000 while they continue payments.

  2. Guaranteed Life Cover €35,023: They can cease paying the €111.66 per month premium. They would be told at that time that they will have €35,023 Guaranteed Life assurance for the remainder of their life.

  3. Guaranteed Cashback €17,644: They can cease paying the €111.66 per month premium. They would be entitled to encash the policy for a guaranteed €17,644. There would be no further cover from this policy.

Unlike some of the older whole of life “with savings/encashment” benefits, these are not investment policies. The figures are guaranteed and you can see the different options available from year 16 onwards (every year you pay beyond year 16 increases the offer available). If the policy is cancelled before 16 years, then the above options are not available.

Survey reveals more women (36%) than men (24%) think that personal responsibility is at the core of overcoming the obesity epidemic

 A survey from a well known protection provider has revealed 48% of Irish people believe that the way to tackle the rising national obesity levels is through school-level education. A survey commissioned by the leading life assurance provider asked 1,000 people throughout the country their views on how they think Ireland’s expanding waist lines should be addressed.

The survey found a split in opinions between genders and age divides as to what is considered the most effective approach. More women than men, 36% as opposed to 24%, believe it’s up to each individual themselves to take personal responsibility if this is a health issue they face; with this view being most prevalent amongst those aged over 55 (46%).

While the healthy living lifestyle trend appears to be very popular in Ireland today, from the booming gym and personal training industries to the popularity of ‘healthy living’ advocates, such as TV personalities and bloggers, it’s hard to believe that now only 40% of Irish people are at a healthy weight.  

Obesity and its impact on Life Assurance

Life cover is different from most insurance products because it is priced based on a number of key criteria which take into account the insured individual’s lifestyle. It is one of the few insurance products which is tailored specifically for the person insured.

This usually means the healthier you are, the lower the cost of the cover. A person’s medical history and lifestyle always comes into play when underwriting life assurance as the cost of cover is based not only on the sum assured and the length of the policy, but also on the individual’s age, state of health and certain lifestyle factors. So, if you smoke, drink a lot of alcohol or are obese, your premiums will be higher to reflect the increased risks to insure someone that has a greater chance of medical issues and shortened life expectancy associated with smoking, liver damage and obesity.

Life companies follow a matrix compiled by reinsurers which give ratings for specific lifestyle factors which are analysed to determine pricing.  It’s important to note that if someone is about 10 pounds over their ‘ideal’ weight, the cost of their life cover should not be affected. If an individual is looking for life cover and would like to know more about how their weight or lifestyle may affect it, why not contact a Financial Broker. A Financial Broker will be happy to provide expert guidance around the available options based on individual needs.

 

Irish worrying less about money, health is still biggest focus……

According to research commissioned by a leading protection specialist, 37% of Irish people view money as their biggest worry this year. What is particularly noteworthy about these findings is that this is almost 10% less than the 46% who said that money was their biggest concern in 2016. The survey asked 1,000 respondents nationwide what their biggest worries were and what their biggest focus was in 2017.

Health was cited as the majority of people’s main focus (37%), followed by career (26%) and travel (13%). What is surprising is that there has been quite a drop in the number of people who identified money as their biggest concern in 2017 when compared with last year. This could this be an indicator that things are on the up for people financially as Ireland is on track to have the EU’s fastest growing economy for the fourth successive year and has a decreasing unemployment rate which last month was at a near 9-year low.

The survey found that after money, 22% worried about their family most in 2017, a big jump from the 14% who said the same the previous year. Meanwhile double the number of respondents said they were concerned with loneliness compared to 2016; 8% versus 4% respectively.

The survey results also highlighted the large difference that exists between the priorities of the younger and older generations surveyed. For 18-34 year olds the focus lies, understandably, much
more on their career (42%), health (19%) and family (13%). While an equal amount of 18-34 year old respondents (10%) said property and travel were at the forefront of their minds. For over 55s their
biggest priority was their health (60%) and travelling (27%).

Overall health is a big focus for every age group surveyed. It is the top focus for 35-54 year olds and over 55s whilst it is the second top focus for 18-34 year olds. One of the ways people are prioritising their health is shown by the uptake in more Health Insurance policies. The largest uptake increase has seen people in their 40s taking out policies, with almost 33,000 people between the ages of 40 and 49 joining a scheme since the start of 2015. As people are becoming more informed and involved in protecting themselves, there has been a noticeable increase in people interested in discussing Serious Illness cover and Salary Protection cover.

There is no escaping that money is still a big worry for many people throughout the country. Unfortunately managing household finances can be challenging. The thought about what might happen in the future that could adversely affect family finances, is never far from peoples’ minds, it would appear. Making contact with a local Financial Broker to discuss personal finances and the options available to people may be one way of helping to alleviate this worry.