What is . . . ?

Life Assurance: This is cover designed to provide a financial lump sum to a family/person/company in the event of the death of a specified individual. There are different kinds of Life Assurance that include:

• Mortgage Protection – Decreasing Life Assurance – ends at set term

• Term Assurance – Level Life Assurance – ends at set term

• Whole of Life cover – Level Life Assurance – No set term

• There is reviewable and non reviewable Whole of Life cover

  Life Assurance with convertible option: You can request a conversion option on some Life cover. This allows you to extend the lifetime of your policy without having to supply any medical information. This allows some people to choose a shorter term for cover now, at a lower cost.

  An example of this benefit would be if you take out €100,000 Life cover for 10 years with a conversion option. During the 10 year lifetime of this plan you might get sick or be struck with an illness that would prevent you from taking out Life cover in the future. The conversion option would allow you to extend the term of your €100,000 Life cover beyond the 10 years and the Life company could only use your medical information from the original application.

  Serious Illness Cover: This is cover designed to provide a financial lump sum to a family/person/company where a specified individual is diagnosed with a Serious Illness.

  Income Protection: This is a cover designed to be a replacement Income if a person is unable to work due to illness or injury. It is particularly important for self-employed people.

  The cost of these covers depends mainly on your age, your smoker status, your health and the length of time you would like the cover.

  Pensions: During your working life, you can save into a Pension arrangement to subsidise your drop in income at retirement. The main advantages of this are that you get tax relief on your contributions and you get tax free growth on your investment.

  Savings/Investment plans: An alternative to saving/investing money in the bank. The main advantage is that there is a much greater potential to grow your investment. The main disadvantage is that your value can go down as well as up.

Stick or Twist

I would like to believe that my clients trust me, particularly the ones who use my services multiple times. But trust is not something easily earned. In my experience I have met with people whom are reluctant to change their existing policy even if it will actually save them money. At times I get the impression some people are dubious of a financial broker’s recommendation for one reason or another.

Lose Out Benefits

The main feedback/reasons I get for not proceeding with a recommendation are that people are concerned that they might lose out on benefits if they change. “What will happen if I die one week after taking out a new life assurance policy?” is a question I regularly get asked. Once you have been accepted by a life company, paid the first premium and the policy has started, you are covered. In essence, if you die the first day of the policy you are covered.

Procrastination

In many cases, people are happy with the advice and just don’t get around to proceeding with it. If people follow up with me (sometimes months after initially showing an interest), the usual response is that “I was really busy and I completely forgot”. After all, who wants to spend time contemplating how much life cover or serious Illness cover their family might need ?

Commissions

“How do I know that you won’t just choose the policy that pays you the most commission?”. I was asked this once, but would imagine it’s a question that some people ponder in relation to brokers. If you are unsure I recommend that you ask questions. A letter of suitability sets out why a broker would choose a specified company/product over another. You could also ask what the broker is being paid to place business in a certain place.

Trust/Confidence

A lot of events have happened in the financial services sector which have left many people with an understandably fragile confidence in the industry. It is clear that some people feel that brokers are guilty by association, which is understandable.

If you have never used a financial broker or have been disappointed with an experience using one and are reluctant to consider it, you have a number of choices. You could do your own research, but potentially lose out on cost saving opportunities only available to brokers. You could ask a friend/relative if they have a trusted adviser you can contact. You can do a bit of both and contact a broker yourself and do your own research (if you are a bit dubious).

You may very well have the most cost effective and appropriate Life Assurance or Pension policy to suit your needs. However if there is a chance that this is not the case, do you think it’s worth exploring alternatives?

Benefits of having a Financial Adviser

Do you have to take out a new policy if you contact me? . . . . . . .

I have had great meetings with local clients over the years, many of whom had never dealt with a financial adviser. One of the things I hear is that people were reluctant to contact me because they were concerned that they might feel obliged to act on the advice I provide that may be an extra expense that they just don’t need.

As a financial adviser, one of the most important things for me to grow my business is to have a significant amount of clients on my books. As such, a person who moves existing policies to my company is just as important as a person taking out a new policy.

What is “existing business”?

If you have a mortgage, you will most likely have a mortgage protection plan. If you have had Pensions (or currently have one) in previous employments, they could very well be still sitting paid up waiting to be moved into a Plan in your own name. You may have savings or an investment policy that hasn’t matured yet or is just working away as it always has, but you have never really reviewed exactly if it is performing to your expectations.

If a client is happy with my advice (whether it is on new or old business), they have the option to move their policies onto my agency. This changes nothing in relation to the benefits of their plan. It only authorises me to contact the life office, as a person’s broker, to get information (values etc.) on the client’s behalf. I am not authorised to make any changes to the plan and the client can contact the Life office themselves directly as normal.

The benefits to a client are that they may not have a broker looking after their interest. I can keep an eye on the cost of a plan and recommend cheaper alternatives if the opportunity arises. I can keep an eye on a savings or Pension plan to make sure it’s reviewed appropriate to your needs and is invested in a fund that matches your investment goal or retirement plans.