Client protection needs guidance

Question 1

When should Protection be first explained to a client?

Answer 1

AHA Terms of Business (TOB)

Question 2

Is it important that you explain to your client that as a mortgage adviser you specialise in mortgage advice and you work alongside a protection adviser who specialises in giving advice on mortgage insurance options?

Answer 2

Yes

Question 3

Can you refer a client to the protection team before Mortgage Offer?

Answer 3

You can refer a client to the Protection Team sooner should the client wish to discuss their protection needs with a specialist before their mortgage offers. A referral earlier in the advice process will allow the client to address their protection shortfalls sooner and give a greater chance of having acceptance terms prior to the client exchanging contracts.

Question 4

How do you confirm if a client does not want to speak to a Protection Adviser?

Answer 4

Send an email to the client to confirm it.

Question 5

Is it important to identify a clients protection shortfalls?

Answer 5

Yes

Question 6

What is Death in Service?

Answer 6

Death in Service (DIS) is an employee benefit whereby the clients’ employer will provide a tax free lump sum, usually a multiple of a client’s basic salary, if they die whilst in employment.

Question 7

What is Life Insurance?

Answer 7

Life assurance is an insurance policy that pays a lump sum in the event of death. This can be used to clear
the outstanding mortgage debt and/or provide a lump sum to support any financial dependents.

Question 8

How can Life Insurance be set against the mortgage?

Answer 8

Life
assurance can be set up on a Decreasing Term Assurance (DTA) basis or a Level Term Assurance (LTA) basis.
A DTA is traditionally set up for repayment mortgages as the sum assured decreases in line with the
repayment of your mortgage. As a result this is typically the cheapest form of life assurance.

Question 9

What is Critical Illness Cover?

Answer 9

Critical Illness Cover (CIC) is an insurance policy that pays out a tax free lump sum in the event of being
diagnosed with one of a specified number of illnesses i.e. cancer; heart attack, stroke etc . CIC can be used
to clear the outstanding mortgage debt and/or provide a lump sum to support yourself or any financial
dependents in the event you were diagnosed with one of the specified illnesses.

Question 10

What is Family Income Benefit?

Answer 10

Family Income Benefit
(FIB) is a type of life assurance that pays out a tax free monthly income rather than
a lump sum for a set period of time. FIB should be considered for clients who have financial dependants that wish to provide ongoing financial support for the dependants in the event of their early death for a specified
period of time. FIB is a cheaper form of life assurance. FIB is also available with combined CIC if the client
requires benefit to be paid on a monthly basis in the event of being diagnosed with a listed critical illness

Question 11

What is Income Protection?

Answer 11

Income Protection (IP) is an insurance policy designed to provide a client with a tax free monthly income in
the event of being unable to work due to accident and/ or sickness. It will typically pay a percentage of the
client’s normal monthly income following an initial deferred period with the benefit being paid until the end
of the policy term, retirement or death.