Ask the Expert - Protection with Jon Hall, Scottish Widows
Ssandle
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Log in here later today (Wednesday 5th February) after the guide to protection essentials for paraplanners with Jon Hall (2-2.30pm) to ask your protection questions.
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Here are all the questions submitted for the live event today that we didn't have time to get to.
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.
An attendee was asking you for a link to the Defaqto spreadsheet Jon, if you could add a link.
Hi everyone, thank you for dialling in today and thanks for your questions! I hope the responses below will help but feel free to reach out if you'd like any further detail.
What CPD is required to advise on protection?
To retain permissions, advisers need to log 16hrs of structured CPD each year, but there are no set requirements on content.
Are there any care fees insurance products anymore?
I believe that Aviva still offer something in this space, but it isn't directly comparable to traditional long-term care plans.
Is rebroking still a thing?
Rebroking is alive and well - for better or worse... The rise of best advice systems like CI Expert have made it easy for replacement policies to be justified on the basis of improving quality of cover, and there are some distributors with business models based on this (they tend to be call-centre type operations, which insurers trade cautiously with). This is also likely to be an opportunity for holistic planning as well, as it is often quite straightforward to source a better policy as part of a review.
Are GP reports still a real pain to get?
Yes and no: it depends if the client's surgery has made use of the new technology available to digitise patient records, complete reports electronically or ideally both! Most insurers will first try to obtain an electronic GP report using the iGPR system, which has an average end-to-end time of around 14 days from insurer request to receipt of report. Not only is it far quicker than doing everything on paper/through the post, it significantly reduces the amount of work required for the GP surgery. At Scottish Widows, we are now completing well over half of our GP evidence requests electronically, and this continues to rise as we actively promote the iGPR system to surgeries.
Has the pandemic resulted in an overall increase in premiums?
There was a 'blip' driven by the dramatic shift in mortality rates during the peak COVID years, but things have almost completely returned to pre-pandemic norms in respect of pricing. Many insurers are now more agile with pricing than they might have been five years ago, and rates are changing on a frequent basis to remain competitive.
What’s the difference between insurance & assurance?
These days, the terms are almost interchangable but traditionally, a life assurance policy would have been written on a whole of life basis, and would contain an investment element (whereas life insurance would be over a fixed term, with no investment element - what we call 'pure protection' now).
With PHI is it worth taking cover on any occupation basis?
TL;DR - Work tasks or ADL policies are probably best avoided if at all possible - unless no other option exists within reasonable cost.
You'll often hear people in the industry say that 'some cover is better than none', but that largely ignores the importance of value for money. In my personal opinion, it's hard to justify a client paying for a policy that would be very difficult to claim on. 'Own occupation' is the standard (and the only incapacity definition we offer with our IP product), and means that the client's claim will be paid if they are incapacitated to the point they can't do their particular occupation (eg. teacher, nurse or paraplanner). A policy written on a 'work tasks' definition (which I think is what you're referring to) is much harder to claim as the client would need to demonstrate that they are unable to complete any paid work at all before a claim is deemed valid. 'Activities of daily living' (ADL) goes one step lower, as the client would need to be unable to independently get out of bed/dress themselves etc before the claim is valid.
Hello, with reference to Scottish Widows Critical Illness Claims where the planholder may be in hospital and unable to communicate, if no LPA is in place what would be required to get the claim assessed?
I have reached out to our claims team and will report back on the exact process for these situations.
Can a life of another policy be taken out on someone without them knowing?
TL;DR - no, I don't think so.
I believe this is legally possible, provided that there is an insurable interest in line with the Life Assurance Act 1774 (which essentially banned people from taking out policies on the lives of random people and then scheming for a premature demise to collect the claim money!). Practically, however, I don't see that this would be possible as all insurers require the medical underwriting questions to be answered by the life assured, including a declaration that they have answered in respect of their own health and have been complete and honest in their answers.
Does the ABI standard of 23 conditions apply to old CI policies even if they didn’t cover them all when it was set up?
The ABI's list of minimum standards was first published in 1999 (and significanty overhauled in 2018), so it only applies to policies written since. If you encounter a pre-1999 policy, it doesn't necesarily mean that it doesn't meet the standards but making comparisions with current products will be difficult as best advice systems probably won't hold the policy wordings in their archive to run reports from. There are some quirks with older policies, particularly those from c.2006 which have such strong payment definitions for cancer that modern policies offer weaker coverage (despite meeting or surpassing the current ABI standards).
For cancer, does the CIC payout depend on the stage, grade or type of cancer?
Generally speaking, an invasive cancer will result in a full payment claim, but insurers have varying definitions of 'invasive', which is where systems like CI Expert are really worth their salt in providing an objective comparison. Policies that include 'early stage' caner as an additional payment will usually offer between 25-50% of the sum assured (not subtracted from the policy value) for cancers such as prostate cancer, which are usually caught in the early stages due to routine screenings. As I mentioned during the session, all policies are different so every insurer will have their own approach, with some notable outliers like Vitality who often use a severity based approach to decide what %age of the policy pot should be paid out, which is very different to 'normal' CIC policies.
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Thanks for answering those @JonHallSWP You're always welcome to stop by the Big Tent.
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.
Back with an update from our claims team for the query below
Hello, with reference to Scottish Widows Critical Illness Claims where the planholder may be in hospital and unable to communicate, if no LPA is in place what would be required to get the claim assessed?
TL;DR - assessing the claim is still relatively straightforward, but making payment is more complex.
There are two parts to this situation: assessment and payment of claim. In any illness claim we would ask for appropriate medical evidence so we can assess the claim, and that would usually involve the life assured giving consent (under AMRA 1988) for the insurer to access their medical records. We will accept an AMRA form where the customer has 'made their mark' and it has been witnessed, but in situations like the one described in the question, we will accept signed consent from the life assured's next of kin. In practice, medical teams are often happy to release the medical information to the life assured's next of kin, which can then be submitted directly to the insurer, bypassing the need for the AMRA process. We regularly use evidence supplied by the customer (or their representative) so this is more or less standard practice.
Without an LPA in place in situations like this, payment of the claim is more difficult as we naturally don't want the funds to the life assured (as they would be inaccessible). The legal requirement for us to make payment to their next of kin is a Court of Protection Order. Once we have the order, we will just need to ask for bank details and then the payment will be initiated by BACS or CHAPS.
This is excellent @JonHallSWP - great resource. Many thanks
I agree. This was a test post an online assembly and I think it worked well.
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.