[PS4SX]
Okay , you can use a P S P as an endowment for mortgage purposes , and it works virtually the same if you 're arranging a mortgage now for a new client , for a new property , the chance are you want the Mortgage Master Policy , because that does the whole thing for you , okay , that 's what its ideal purpose is . Erm , where you might use P S P , is when you 've got a client now , who 's anticipated buying perhaps something in the future . Okay , so they 're buying now , then you want a Mortgage Master , because that 's what its purpose is . But you might be talking to a client , says , but at the moment , I 've got no need , erm , or I 've got n no intention of buying now , but I might be buying in a year or two year 's time . This is where a sales idea could come in , but for the right reasons it could be good , but also , for the bad reasons , it could be totally wrong . Without trying looking very heavily at these type of sales , where savings plans have been sold for future mortgages , erm , the clients are left thinking it 's building up money for their , for their deposit , for their legal fees , and it guarantees them a mortgage at sometime in the future .
[JT3PSUNK]
Mm .
[PS4SX]
Okay , now putting both bits aside , if we 're making sure , right okay , if we 're making sure that the product is being sold for the right reasons , i.e. the client is separately saving for deposit , for house moving fees , legal fees , all the other fees , and they could still afford to do this , then I believe it 's a good thing that you can suggest to your clients .
[JT3PSUNK]
Mm . Mm .
[PS4SX]
And it 's gon na work along the lines of well , if we 're looking at a typical endowment mortgage , yeah , normally they run for twenty-five years , do n't they . Okay , do they , do they run for twenty-five because we like them to , or because we ca n't afford to pay them any sooner .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Usually because that 's the minimum time we can afford it over . If we can reduce that term , at no extra cost , surely be an advantage .
[JT3PSUNK]
Mm .
[PS4SX]
Okay . Borrowing the money , let's , I mean , I do n't know , fifty thousand , let's say , put a figure on it for a moment . We 've got a future , perhaps aspiration to have a fifty thousand pound mortgage to buy the house , the flat , or whatever they want , in , let's say , two year 's time . If we consider starting the endowment here but presumably gon na run twenty-five years in fact you 're gon na finish in year twenty-three when they borrowed the money , are n't they , so they 've only borrowed the money for twenty-three years .
[JT3PSUNK]
Mm . Mm .
[PS4SX]
What the repayments a month on a fifty thousand pound mortgage ?
[JT3PSUNK]
It 's three ninety-five .
[JT3PSUNK]
About three hundred .
[JT3PSUNK]
Three hundred and ninety five .
[JT3PSUNK]
Three ninety five . So , f four hundred call it .
[JT3PSUNK]
You better .
[JT3PSUNK]
[JT3PSUNK]
You say that right from the heart .
[JT3PSUNK]
I say that [UNCLEAR]
[JT3PSUNK]
Is that , is that gross or net .
[PS4SX]
Yeah . So that 's nine thousand six hundred your client 's not now going to pay , is n't it . Yeah .
[JT3PSUNK]
Yeah .
[PS4SX]
It saved two years repayments at the end of the mortgage , because endowments matured here , saving those last two years , purely because we started paying in two years before we actually took the mortgage out .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
Yeah .
[PS4SX]
Make sense .
[PS4SY]
Do you get a six per cent bonus on a Mortgage Master as well as the
[PS4SX]
Oh , yes ,
[PS4SY]
you do , right .
[PS4SX]
Well , they 're exactly the same .
[JT3PSUNK]
Thank you .
[PS4SY]
What 's what 's the technical difference between the two .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Very little . [UNCLEAR]
[PS4SY]
What is the very little .
[JT3PSUNK]
Is it the allocation , then .
[PS4SX]
No .
[PS4SY]
No , it 's the same .
[PS4SX]
Yeah , I mean , there 's some slight erm , differences when it comes to re mo moving again , and that sort of thing .
[PS4SY]
Oh ,
[PS4SX]
But more of that we can [UNCLEAR] move into the mortgage course .
[PS4SY]
Yes , right , right , yeah , that 's the difference , is n't it .
[PS4SX]
That 's right , there 's some slight technicalities [UNCLEAR]
[PS4SY]
Their guaranteed increases if you move , yeah ,
[PS4SX]
But
[PS4SY]
That 's the difference .
[PS4SX]
none that would make any difference at this stage for selling it .
[PS4SY]
Yeah .
[PS4SX]
But again , I emphasize , it must be sold in the right situation .
[JT3PSUNK]
[JT3PSUNK]
[UNCLEAR] case .
[PS4SX]
If the client is putting money for a deposit , the savings and legal fees , all that separately , and they can still afford to do this ,
[PS4SY]
Yeah .
[PS4SX]
then it 's worth looking at the idea .
[PS4T0]
What about somebody who 's wanting to top up , like , say their own , their own , their in the property already , they just want erm , an extra top-up .
[PS4SX]
Right , I mean , you you might find a client whose perhaps taken out a further mortgage , for , you know , some house improvements or something ,
[PS4T0]
Yes , yeah .
[PS4SX]
and they 've got now a deficit of , life cover there and extra , again you take out one of these for it .
[PS4T0]
Yeah , I 've got a client who
[JT3PSUNK]
Do that then .
[PS4T0]
We sold a P S P too . They had a mortgage with the Woolwich and an endowment for a fixed period of twenty five years
[PS4SX]
right
[PS4T0]
after three or four years they thought they might move so , we said well take out a P S P cos that provides a savings vehicle , and if you do move you can use that as part of the mortgage increase .
[PS4SX]
That 's right .
[PS4T0]
They made enquiries from the Woolwich , and they said no , we ca n't accept this savings plan , we want a proper endowment policy . So they came running back , saying this thing you sold me is a load of rubbish , Wool Woolwich say it 's not good enough , you know , what 's it all about . So you 've got to be very careful ,
[PS4SX]
But
[PS4T0]
when you suggest to them , they can buy a house or get a mortgage with it .
[PS4SX]
That 's right , yes , yeah
[PS4T0]
It goes straight in , and they do n't forget .
[PS4SX]
What a lot of other societies will today though , will not necessarily want policies assigned to them anyway .
[PS4T0]
No , no , no , quite , but they 're all
[PS4SX]
In years gone by , it was like ninety nine per cent
[PS4T0]
Sure .
[PS4SX]
of them all wanted this . Endowment assigned to them , so they would see it , they would know it , they would check it and they 'd be in that position .
[PS4T0]
It 's only the odd one , is n't it ,
[PS4SX]
That 's right .
[PS4T0]
that catches you out .
[PS4SX]
Nowadays , the majority of building societies do n't want to know about , you know , well , it 's up to you , we give you the money ,
[JT3PSUNK]
Yeah .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
It 's it 's [UNCLEAR]
[PS4SX]
It 's like interest over the mortgage .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Well , P S P's an endowment . That 's what I 'm saying , you can use that .
[PS4T0]
It 's a whole life endowment , saving [UNCLEAR]
[PS4SX]
If you were buying a house , though , we do a Mortgage Master
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
If this is something that maybe in the future , then you ca n't use a Mortgage Master for a , for a future house purchase , you can use the P S P .
[JT3PS000]
Is is there is there any erm , major diffe , is there any major difference between , as far as , in in relation to mortgage er , protection . Is there difference
[PS4SX]
hold on at the back , one question
[JT3PS000]
Is there any major between the P S P and the er , the Mortgage Master which would , nor normally say to the client , well , I would recommend in these circumstances that you have the Mortgage Master , because it does .
[PS4SX]
That 's extra .
[JT3PS000]
The only ru , you have a Mortgage Master when you 're selling the house now
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
buying a house now .
[JT3PS000]
Someone just mentioned , yeah , it just sprang to mind , someone just mentioned er , the options on moving , if you , cos [UNCLEAR]
[PS4SX]
Totally different effect . [UNCLEAR] make no difference at this stage , the only thing is , if you say , if you 're buying a house now , you 'll need a Mortgage Master ,
[JT3PS000]
Yes .
[PS4SX]
If you 're not buying it now , you ca n't have a Mortgage Master , so therefore , you must have a P S P .
[JT3PS000]
Mm . Right , tha tha that is the only difference , yes .
[PS4SX]
[UNCLEAR] there the distinction , [UNCLEAR]
[JT3PS000]
And and the other question is that you say , er , building societies are n't actually er , insisting on endowments now , I mean , what [UNCLEAR]
[PS4SX]
[UNCLEAR] being assigned .
[JT3PS000]
not insisting on them being assigned .
[PS4SX]
No .
[JT3PS000]
No . Okay . [UNCLEAR]
[PS4SX]
I mean , basically building societies today are saying , well there 's your money , all we want you to say is that in twenty five years time or earlier , you 'll be able to pay us back . How you do it , is entirely up to you .
[JT3PS000]
Oh , I see .
[PS4SX]
Whether that money comes from a pension , a P E P , off the pools
[JT3PSUNK]
Mm .
[PS4SX]
they 're not really worried , as long as they 've got it .
[JT3PSUNK]
Yeah , and if they do n't get it , they convert into a repayments , so nothings lost , really .
[JT3PS000]
I see . [UNCLEAR]
[JT3PSUNK]
or they take the house back
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[UNCLEAR] notice of deposit , rather then [UNCLEAR]
[PS4SX]
I mean , they 've got collateral in the bricks and mortar , have n't they ?
[JT3PS000]
Yes .
[JT3PSUNK]
It 's their 's [UNCLEAR]
[JT3PSUNK]
Yes , as you say , they could always repossess it , could n't they , basically .
[PS4SX]
Yeah , that 's right . I mean , pick up David 's point , you know , it 's
[JT3PSUNK]
[PS4SX]
To pick up David 's point now , if this is the client who 's already running the house , the mortgage , it 's , you know , a few years old , they want to take out a further advance , for some house improvements , or something , then obviously they now need more , so it might be at this stage we then want a P S P for the remaining , you know , ten years , eleven years , twelve years , or whatever , because they 've borrowed some more money from the building society . Yeah . and the advantage it would be , for the majority of endowments you 're gon na find out there for mortgage purposes , would not have living insurances attached to them . You know , we can add it to this bit . They might even want to , you know , take out a whole new one ,
[JT3PSUNK]
[PS4SX]
with living insurance as well . It then comes down to affordability .
[JT3PSUNK]
Yeah .
[PS4SX]
They 'd like their mortgage paid off , people had a serious illness or acc erm heart attack or something , before actual maturity .
[JT3PS001]
Just just as a matter of interest , Graham , I was looking at the er , the rates yesterday , cos I 've been paying my mortgage over ten ye , over the last eleven years , and erm , bearing in mind the premiums I 've been paying before my endowments would have been er , er , you 'd expect to be more recent , because I was er , young [UNCLEAR]
[PS4SX]
cheaper then because you were younger .
[JT3PS001]
Well , actually , looking at the erm , premiums in the book , and it worked out that the total I was paying out in endowments , if I got the same level of cover under the protected savings plan , over twenty five years with living assurance , it was , it was only working about seven pound more , you know , [UNCLEAR]
[PS4SX]
Yeah , right , and you 've got all that extra benefit .
[JT3PS001]
and I 've got all that extra benefit , and on , er , another ten years older .
[PS4SX]
Right .
[JT3PS001]
Erm , so
[PS4SX]
so they 're quite competitively priced
[JT3PS001]
So so , what , no , if it appeals , what I 'm saying is , if it appeals to me , I could imagine it would appeal to a lot of people out there .
[JT3PSUNK]
That 's right , yes .
[PS4SX]
That 's right , then again , I think that 's one of the biggest plans that you can use as your door-opener .
[JT3PS001]
Yeah .
[JT3PSUNK]
Yes .
[PS4SX]
You know , whether [UNCLEAR] you end up selling it , if that is best advice or not ,
[JT3PSUNK]
Yeah .
[PS4SX]
is irrelevant at this stage ,
[JT3PSUNK]
Mm .
[JT3PSUNK]
Yeah .
[PS4SX]
you just want something [UNCLEAR] come back to the people I was talking originally in the week , that
[JT3PSUNK]
Yeah .
[PS4SX]
we make something to get in , that pricks their ears up , and think , yes , I want to listen to this guy .
[JT3PSUNK]
Mm .
[JT3PSUNK]
Yeah .
[PS4SX]
He 's got something to offer .
[JT3PSUNK]
Mm .
[JT3PSUNK]
Yes .
[PS4SX]
Okay . I mean , this next plan will also take us down that path . Whether we actually sell it or not is irrelevant , it 's the fact that it might just be the hook to get inside someone 's house .
[JT3PSUNK]
Mm .
[PS4SX]
The question that I would raise with this plan , is Mr client , what bills do you have each month that must be paid , no matter what ? Okay , so it 's you and your family living in a house . as most of us do . What bills have you got each month that you 've got ta pay ?
[JT3PSUNK]
Mortgage .
[PS4SX]
Mortgage or rent , firstly , yes .
[JT3PSUNK]
Council tax .
[JT3PSUNK]
Water .
[JT3PSUNK]
Utilities .
[JT3PSUNK]
All the variables and unvariables .
[PS4SX]
Er , all the utilities , yeah .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Food .
[JT3PSUNK]
Clothes .
[JT3PSUNK]
Clothing .
[JT3PSUNK]
Maintenance .
[JT3PSUNK]
Travel .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Insurance premiums .
[PS4SX]
Etc , etc , etc , the list can go on and on and on . There 's lots there
[JT3PSUNK]
[PS4SY]
Actually , if you take the , if you , if you make the long list and then say to the client , well now , what can you do without . Tell me what you do n't need , you put holidays on it , you can buy ,
[JT3PSUNK]
[PS4SY]
a new new car for the wife every year , you know , all these sort of frivolities , and then say , then what can you live without , and when you start crossing them out , there 's only one or two that actually go out .
[PS4SX]
Right , [UNCLEAR]
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
we need to be able to have provision to pay all the bills every month .
[JT3PSUNK]
That 's right .
[JT3PSUNK]
Yeah , if your self-employed , then do n't forget there 's tax as well , [UNCLEAR]
[PS4SX]
That 's right , yeah , the tax .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
National Insurance , and all the other bits that must be paid , okay .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
So what dictates that we 're in a position to pay those bills off .
[JT3PSUNK]
[JT3PSUNK]
Our income .
[PS4SX]
Income . So from your income , that we must have , says we can do all those things , and have our standard of living . So the question Mr client is , what happens if that disappears ? What bills now do n't we have to pay anymore .
[JT3PSUNK]
None .
[JT3PSUNK]
None of them .
[PS4SX]
They all still want paying , then . But if you have n't got an income , how would you pay them .
[JT3PSUNK]
Great difficulty .
[PS4SX]
With great difficulty . Mr client , if I can rest you assured on that point , that we could be in a position whereby you ne you never be without an income , do you think that 's an important area that we look at .
[JT3PSUNK]
Mm .
[PS4SX]
Yes .
[JT3PSUNK]
Yeah .
[PS4SX]
It would be for you as well , would n't it .
[JT3PSUNK]
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
I 'd rather fantasize on that .
[PS4SX]
Okay , Health Master , is that the plan that 's going to fit the bill .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
I thought it was the Mortgage Master .
[JT3PSUNK]
No , we 've done that .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
A little concept , a little drawing like that , if you emphasize the wha the whole plan is about , does n't it . Can your client live without an income , they 've just convinced you that they ca n't , they now want to know about this Health Master .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[PS4SY]
Exactly the same example for selling life assurance to the wife .
[JT3PSUNK]
Or living assurance .
[PS4SY]
You know , you 've got to pay all the bills .
[JT3PSUNK]
[UNCLEAR]
[PS4SY]
[UNCLEAR] but how much do these cost , you know , and there you go .
[PS4SX]
That 's right . I mean , different times , like tomorrow , we actually go through lots of diagrams that we can use ,
[JT3PSUNK]
Mm .
[PS4SX]
to emphasize certain products .
[PS4SY]
Yeah .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Okay , cos it 's these little diagrams that get the whole point across .
[JT3PSUNK]
[PS4SX]
Rather , you know , an hour talking about the actual product .
[JT3PSUNK]
Yes .
[PS4SX]
So , we call it a P H I policy , or not P H one , P H I , for Permanent Health Insurance , that 's exactly what it is Okay , so that 's a Permanent Health Insurance policy . Who , who do you think would want one ?
[JT3PSUNK]
Anybody who [UNCLEAR]
[JT3PSUNK]
Everybody .
[PS4SX]
Basically anyone with an income , is n't it .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Potentially , we 've got twenty five million people out there with an income .
[JT3PSUNK]
Does it cover just housewives ?
[PS4SX]
Just housewives ?
[JT3PSUNK]
Well , does it , does it cover housewives ?
[JT3PSUNK]
No , they do n't work .
[JT3PSUNK]
I tell you , it could do .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Try and tell the housewife they do n't work .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Walk out there in a straight line [UNCLEAR]
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Okay so of those twenty five million , we 'll find some are employed , some are self-employed , yes .
[JT3PSUNK]
Mm .
[PS4SX]
Which of those two categories you think this would appeal to mainly .
[JT3PSUNK]
Self-employed .
[PS4SX]
Majority , well , mainly it would be self-employed , would n't it . There 's about three and a quarter million of those , as and when this slide was made for the self-employed .
[JT3PS001]
Wou would there , not be er , possibly a conflict of interest there , if er , for example , suppose it was a self-employed person . Times was hard , and he had the advantage over the insurance company of knowing that his profits might be tapering off in the near future , and he thinks , ah , I 'll get , er , I 'll take out a Permanent Health Insurance , based on my present income to protect seventy-five , because I know in about three or four years time , my income would have gone down to about sixty per cent of what it is , so .
[PS4SX]
But you 'll be ill at the time , is n't it , to be able to claim .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
So when , when he 's ill , he just [UNCLEAR]
[JT3PSUNK]
Based on his last year 's , er , earnings , yeah .
[PS4SX]
But we 'll deal with how much he can have , and the figures etc , later on .
[JT3PSUNK]
Yes , yes .
[PS4SX]
But either way , he 's still got to be ill .
[JT3PSUNK]
He 's got to be ill , that 's right .
[JT3PSUNK]
To be able to claim .
[JT3PSUNK]
Yeah , that 's right .
[JT3PSUNK]
I 'm taking it out .
[PS4SX]
So , does this mean then , employed people would n't want this contract .
[JT3PSUNK]
No .
[JT3PSUNK]
Not at all .
[PS4SX]
Certainly not
[JT3PSUNK]
[PS4SX]
Who was employed before they came here , that had erm , sickness pay from their employer for any time they were off .
[JT3PSUNK]
Oh , I have , [UNCLEAR] wife .
[JT3PSUNK]
[ANONYMIZATION] you had your hand up , how long would you be paid for if you were off sick ?
[PS4SY]
I I ca n't remember , but probably six months .
[PS4SX]
Six months , exactly
[PS4SY]
Nine months , yeah .
[PS4SX]
Okay .
[JT3PSUNK]
Yeah , the same , yeah .
[JT3PSUNK]
Yeah , same ,
[JT3PSUNK]
Six months , [UNCLEAR] reducing to fifty per cent after six months .
[JT3PSUNK]
Mine was a year .
[PS4SX]
Right . What you 're finding is , depends normally on length of service with a company , er , but the longer someone 's been there , I think th the best I 've heard , and that 's what I used to get , was sort of six months full salary , six months half salary , after that it was at company discretion .
[JT3PSUNK]
Yeah .
[PS4SX]
Okay , now the police force , the armed services are totally a different ball-game , because they get very good pay benefits , so it 's unlikely that we can help those sort of people , but , but of the normal , sort of type occupations , the best I think you gon na find , I think , is six months full salary , six months half . Unless they 're sort of directors of their own company , things like that , then , you know , it could be an unlimited supply of money , basically . Depending on how much there is in the kitty of course . But
[JT3PSUNK]
[PS4SX]
that means , there 's a lot of people that wo n't have six months full , six months half , if might be , you know , a couple of months full , a couple of months half . Now if , let's say , if we took an average of three months full ,
[JT3PSUNK]
[PS4T0]
[UNCLEAR] three months half salary , you know someone 's got money for at least six months . But who , he would , had been in a financial problem after three months , when it drops to half pay .
[JT3PSUNK]
Yeah .
[PS4SX]
Yeah . A couple , okay , after the six months when it stops , presumably we 're going to be in a position of , on State Benefits . Yes . So even the employed would have a need , but it might not be so urgent , but it might not be so urgent as the self-employed guy , whose gon na need money after how long ?
[JT3PSUNK]
Straight away .
[PS4SX]
Straight away , is n't it , I mean , as soon as you stop laying your bricks , you stop earning your money , basically , do n't you
[JT3PSUNK]
[PS4SX]
Out there in the big real world . Okay , so therefore it 's gon na appeal , perhaps more so to self-employed , but even so , the employed would still need it . And , statistics would tell us , that actually twenty-five per cent of the work force have some form of income protection , which is great news .
[JT3PSUNK]
Is it adequate ?
[PS4SX]
Good question . That we do n't know . But just looking at that figure , what does that mean , positively for us .
[JT3PSUNK]
Seventy-five per cent do n't .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Seventy-five per cent do n't have Income Protection . Which is even better news , is n't it , for us , not for them , of course .
[JT3PSUNK]
[JT3PSUNK]
Most people wo n't know they 've got it anyway .
[PS4SX]
Sorry .
[JT3PSUNK]
Most people wo n't know they 've got it anyway .
[PS4SX]
That 's right , I mean , again , it 's one of those things , it 's in the benefits package , if you work for a company , you do n't want to know about it until you need to claim .
[JT3PSUNK]
That 's right , then you realise how little it is .
[PS4SX]
Exactly right . I mean , people say , well , there 's State Benefits ,
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
what 's the basic state sickness benefit ?
[JT3PSUNK]
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Fifty fifty-six pounds ten a week . Who can manage on that .
[JT3PSUNK]
Yeah , that right .
[PS4SX]
Okay , so looking at numbers of people off work ,
[JT3PSUNK]
[UNCLEAR] having a drink in n it
[PS4SX]
how many people do you think , if we looked across the country now , would we find that were actually claiming sickness , or gon na be off erm , for sick , for up a month , for up to one month . How many people do you think we 'd find ?
[JT3PSUNK]
A lot .
[JT3PSUNK]
Oh , a lot .
[JT3PSUNK]
Five per cent .
[JT3PSUNK]
More than that .
[PS4SX]
Which is how many , what did you say , twenty-five million [UNCLEAR]
[JT3PSUNK]
Twenty-five million [UNCLEAR] two and a half [UNCLEAR]
[PS4SX]
[UNCLEAR] a millionish , one point two . You 're not far off , it 's about one and a half million , the D S S tell us , could be off work at any time for up a month .
[JT3PSUNK]
Blimey .
[PS4SX]
Now it 's a lot of people , it 's only a short period of time , is n't it , one month .
[JT3PSUNK]
Mm .
[JT3PSUNK]
Mm .
[PS4SX]
Now how many of those , do you think , will still be off after six months .
[JT3PSUNK]
Not many .
[PS4SX]
How many is not many , , I 'll put a figure on it .
[PS4SY]
Probably five per cent again .
[PS4SX]
Thank you [UNCLEAR]
[JT3PSUNK]
[JT3PSUNK]
Say eighty thousand .
[PS4SX]
No , one point two million .
[JT3PSUNK]
One point two million .
[JT3PSUNK]
He 's a ventriloquist .
[JT3PSUNK]
Strewth .
[PS4SX]
One point two million these are D S S statistics .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
That 's a hell of a lot , is n't it .
[PS4SX]
Still be off after six months .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Malingerers
[JT3PSUNK]
How many do you think after a year ?
[JT3PSUNK]
A million .
[JT3PSUNK]
Nine hundred .
[PS4SX]
Who said that . They reckon a million people would still be off after a year . Now those people , even at the best we spoke of , six months full , six months half , are now becoming into a problem area , are n't they ?
[JT3PSUNK]
Mm .
[JT3PSUNK]
That 's a hell of a lot of people .
[JT3PSUNK]
It is a lot , in n it .
[PS4SX]
Yes .
[JT3PSUNK]
But it 's good though .
[JT3PSUNK]
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
and again get you thinking . If you 're ill , off work , what 's the last thing you want to worry yourself with .
[JT3PSUNK]
Money .
[PS4SX]
Money problems is n't it
[JT3PSUNK]
Going back to work .
[JT3PSUNK]
[JT3PSUNK]
Going back to work .
[JT3PSUNK]
[PS4SX]
Okay , the last thing that 's gon na help you get better , is worrying about money , is n't it .
[JT3PSUNK]
Yeah .
[PS4SX]
Just give you an idea we 've got a selection of current claims here . No need to write these down , just for information . Got a florist took a claim out January of eighty-nine , reasonably low premiums , fourteen pound , thirty-two a month . May eighty- nine , only four months later , having had , having had a finger amputated , have received monthly benefits from the time of claim up until going back to work , of thirteen thousand , four hundred and seventy-five pounds .
[JT3PSUNK]
Jesus .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[UNCLEAR] for a finger .
[PS4SX]
No , no , that 's right , [UNCLEAR]
[JT3PSUNK]
She what .
[JT3PSUNK]
She got that for a finger , what about the
[JT3PSUNK]
[JT3PSUNK]
[UNCLEAR] sound levels , sorry , [UNCLEAR] switch it off .
[JT3PSUNK]
If she 's getting that for a finger , I 'm gon na see Mr [ANONYMIZATION] the American , and flog him a policy .
[JT3PSUNK]
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[JT3PSUNK]
I thought you said Mr Blobby .
[JT3PSUNK]
[PS4SX]
Company Director , April eighty-seven , just under fourteen pound a month premium , September eighty-nine , through chest pains , stress and angina .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[UNCLEAR] stress .
[JT3PSUNK]
Good excuse , in n it , chest pain
[JT3PSUNK]
What a whinger .
[PS4SX]
Angina 's a bit more than stress , is n't it .
[JT3PSUNK]
Bit of a con .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
The friendly doctor .
[JT3PSUNK]
You have to be off for a while to receive that , or straight away .
[JT3PSUNK]
Yes .
[PS4SX]
Depending on we look for details , as we go through it . Teacher , March eighty-seven , low premiums . Lower risk . September ninety-two , through stress and depression
[JT3PSUNK]
My God .
[PS4SX]
[UNCLEAR] that one , one thousand six hundred and ninety-five pounds .
[JT3PSUNK]
That 's cos she wanted [UNCLEAR] paid .
[PS4SX]
We 've got a brick-layer . August eighty-nine , took the policy out . March ninety [UNCLEAR]
[JT3PSUNK]
Here we go .
[JT3PSUNK]
[PS4SX]
nearly four times as much premium as the teacher , received pres er , premium payments of fourteen thousand two hundred .
[JT3PSUNK]
Better than laying bricks .
[JT3PSUNK]
[JT3PSUNK]
He 's cracked it .
[JT3PSUNK]
[JT3PSUNK]
They keep paying us forty quid a month , I 'm gon na get a nice fourteen and a half grand this year .
[PS4SX]
Yeah , but you 've still got ta be signed off sick . So he 's got to have , you know , doctor 's evidence [UNCLEAR] .
[JT3PSUNK]
Doctor it hurts .
[JT3PSUNK]
[JT3PSUNK]
Doctor [UNCLEAR] my back hurts , here 's another twenty quid .
[JT3PSUNK]
[PS4SX]
Okay , definition of the plan . What do you think wh , what do you think it is .
[JT3PSUNK]
Income replacements .
[JT3PSUNK]
Non , non qualifying ,
[JT3PSUNK]
Non qualifying , unit linked ,
[JT3PSUNK]
No .
[JT3PSUNK]
No , back to the future .
[JT3PSUNK]
Yeah .
[PS4SX]
Joint life , no survivor .
[JT3PSUNK]
[PS4SX]
Non-qualifying , unit linked , life assurance policy , providing permanent health insurance benefits Now , all the other policies we 've looked at this week were qualifying , were n't they .
[JT3PSUNK]
Yes .
[PS4SX]
Yes , that 's the first non-qualifying , so we 'll see some different rules on this anyone like to tell what they , the meaning is behind the word permanent in permanent health insurance .
[JT3PSUNK]
You ca n't take it away .
[PS4SX]
By
[JT3PSUNK]
Up up to the selected , up to the selected age , you can claim as many times
[PS4SX]
That 's right , in other words , the insurance company ca n't back out of the contract , providing the client is paying his premiums . So we ca n't decide , as [ANONYMIZATION] regardless of how many times they claim , we ca n't say , enough 's enough , we 're not gon na honour the contract any more . Okay , so once it 's signed and accepted , the client , does their part of the bargain , i.e. pays their premiums , then there 's no way we can decide to opt out of the contract ,
[JT3PSUNK]
So .
[PS4SX]
so therefore they 've got it for as long they want it .
[JT3PSUNK]
So they can claim
[JT3PSUNK]
So they can claim as many times as they , as they want .
[JT3PSUNK]
Yeah .
[PS4SX]
Claim twelve times a year for the next forty years , right up until retirement age , if they wish .
[JT3PSUNK]
Yeah .
[PS4SX]
We ca n't decide to opt out of the contract
[JT3PSUNK]
Mm .
[PS4SX]
Providing the claim 's legitimate , and they 're doing all their bits from their side of the fence , keeping the [UNCLEAR] the er , plan in operation , we ca n't decide we 've had enough . Which is good news , I mean , from a client , they 've got control over whether they keep you going or not .
[JT3PSUNK]
Blimey if your a [UNCLEAR]
[JT3PSUNK]
Yes , yes .
[JT3PSUNK]
If it goes , if they , sort of pay for an excessive size , er , [UNCLEAR] or what , does the company set up their own medical examination or ,
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
If we are in any way , dubious about the nature of the claim ,
[JT3PSUNK]
Yeah .
[PS4SX]
then we 've got our own medical people or specialists we would call in , to say , talk to the client 's specialist , please , between the two of you agree that we should be paying this claim or not .
[JT3PSUNK]
Otherwise , just the doctor 's note is sufficient
[JT3PSUNK]
That 's right . [UNCLEAR] But yeah , we do get a representative from the client , i.e. his doctor or specialist or whatever , and one of our people to talk to each other , and then work out who 's right and who 's wrong .
[JT3PSUNK]
Is it
[JT3PSUNK]
Is the premium paid while , whilst still claiming ?
[PS4SX]
Er , no
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
The premiums built in automatically .
[JT3PSUNK]
Is it .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Do n't let anyone
[PS4T0]
Is th , is there any ever , ever any situation which , I mean , I know in in most cases you 'd obviously accept the er , the opinion of the er , claimant 's doctor . But is there any situations where Abbey Life can overrule the doctor and say , we 're not happy with this , we want to appoint , we want to give him a medical with our own doctor .
[PS4SX]
Well , has just answered over here . Our specialist will talk to the client 's specialist , and between them agree
[PS4T0]
Yeah .
[PS4SX]
who 's right
[PS4T0]
Oh yeah , no , I understood that , but I mean , I thought , could , could he actually over-rule the client 's specialist , that 's all I 'm saying .
[PS4SX]
No , I mean , we 're , well I do n't know ,
[JT3PSUNK]
Yes .
[PS4SX]
I mean , between the two specialists , to work out themselves .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[UNCLEAR] and if we 're finding that their specialist is inaccurate .
[JT3PSUNK]
Yeah .
[PS4SX]
Yes , we would do .
[PS4SY]
If our guy does n't agree , they 'll say right , you know , we 'll have a look ourselves .
[JT3PSUNK]
Right .
[PS4SY]
Okay so it covers not only illness , but also accident as well .
[JT3PSUNK]
[UNCLEAR] so much money [UNCLEAR]
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[UNCLEAR] paid for mine .
[JT3PSUNK]
That 's right .
[PS4SX]
So if they 're off either due to illness or accident .
[JT3PSUNK]
[UNCLEAR] index linked .
[JT3PSUNK]
Yes ,
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
that 's right [UNCLEAR] discussed why I was asking this question , thought there might be a [UNCLEAR]
[PS4SX]
So do you think , then , that this policy could only cover people with an income .
[PS4SY]
No .
[JT3PSUNK]
Yes .
[JT3PSUNK]
Yes .
[JT3PSUNK]
I 'd say
[JT3PSUNK]
No .
[JT3PSUNK]
Yes .
[JT3PSUNK]
Yes .
[JT3PSUNK]
Yes .
[PS4SX]
I 'll go with the noes .
[JT3PSUNK]
No .
[JT3PSUNK]
No , because [UNCLEAR]
[PS4SX]
Who without an income then , could have one .
[JT3PSUNK]
Housewife .
[PS4SX]
Housewife . Yeah , got a picture of [ANONYMIZATION] wife there . Okay , imagine she 's effectively not earning a tangible income .
[JT3PSUNK]
Mm .
[PS4SX]
But if the housewife is unable to perform her duties , what 's the husband gon na have to do ?
[JT3PSUNK]
Take out time off work
[JT3PSUNK]
trade her in for a new model
[JT3PSUNK]
[JT3PSUNK]
Swedish au pair ,
[PS4SX]
okay , either way , it 's going to be a drain in the income to bring someone else in .
[JT3PSUNK]
Yeah .
[PS4SX]
The husband to have time off work to look after the children ,
[JT3PSUNK]
But if he remarries .
[PS4SX]
There 's gon na be a loss of income , is n't there .
[JT3PSUNK]
But if he remarries .
[PS4SX]
What the au pair ?
[JT3PSUNK]
[JT3PSUNK]
If he marries the au pair , what happens then .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[UNCLEAR] housewife [UNCLEAR]
[JT3PSUNK]
Yeah .
[JT3PSUNK]
Yes .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[UNCLEAR] that 's covered .
[JT3PSUNK]
Could be [UNCLEAR]
[JT3PSUNK]
Yes .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Yes .
[PS4SX]
You 've either got to be , earning money , and you have a Health Master to match your salary , or you can be a housewife ,
[JT3PSUNK]
Mm , interesting .
[PS4SX]
for which there is a pre-set
[JT3PSUNK]
What are the limits
[PS4SX]
Erm , plan .
[JT3PSUNK]
Is there a limit
[PS4SX]
Yes ,
[JT3PSUNK]
on , oh , thank you .
[PS4SX]
You 're welcome .
[JT3PSUNK]
[PS4SX]
For the housewife there is a pre-set maximum limit of five thousand , six hundred and forty pounds per annum benefit .
[JT3PSUNK]
Depends [UNCLEAR]
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Five thousand , six hundred and forty pounds ,
[JT3PSUNK]
Oh , right .
[PS4SX]
That 's the maximum that she can have . Five , six , four O
[JT3PSUNK]
What 's that based on
[JT3PSUNK]
Anything in particular .
[PS4SX]
About a hundred and eighty pound a week .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Sorry .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
That 's , that 's just the figure that Abbey have said , that 's the amount , they 'll be happy to pay
[JT3PSUNK]
Limiting their risk .
[PS4SX]
Yep
[JT3PSUNK]
Yes , erm , there are very few companies actually offering that that sort of cover .
[PS4SX]
That 's right .
[JT3PSUNK]
That 's right .
[JT3PSUNK]
So it 's , it 's got a bargaining position .
[PS4SX]
That 's right . I mean , as you say , there 's very few companies that offer any form of benefit to housewives , they 're either working or they 're not , they have a Health Master , or not .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
That 's the limit in total pounds , then .
[PS4SX]
Per year . So
[JT3PSUNK]
How do they , how do they work that out , because if they have n't got an income , how do they say , well , you you know .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Well , they just say , that 's the amount you can have
[JT3PSUNK]
Oh you get , that 's it , fixed amount .
[PS4SX]
That 's it , that 's it that 's the maximum
[JT3PSUNK]
Fixed amount .
[JT3PSUNK]
[JT3PSUNK]
That 's the maximum depending on the premium ,
[PS4SY]
Yes , if you got ta , if you 're fully funded on the premiums if you take out [UNCLEAR]
[PS4SX]
Well , the premium will be driven by the amount , would n't it .
[JT3PSUNK]
Yeah , sure , sure .
[PS4SX]
Yeah .
[JT3PSUNK]
So if you take out [UNCLEAR]
[JT3PSUNK]
if they can afford the premium they can have the amount .
[JT3PSUNK]
Yeah , right , so it 's not related , no
[PS4SX]
[JT3PSUNK]
Got ya .
[PS4SX]
Okay , definition of disability , what they 've actually got to be , to be able to claim is unable to perform any part of their normal occupation . That 's why we had the foris the florist claiming
[JT3PSUNK]
Mm .
[PS4SX]
for the finger amputated . She was unable to do any particular part of her job .
[JT3PSUNK]
[PS4SX]
No [ANONYMIZATION] she was the one , that put her finger on the bows , when they tied the bows , you know .
[JT3PSUNK]
[PS4SX]
And , okay , unable to perform any part of her normal occupation and they 're not doing anything else , for which they 're paid , not following any other gainful occupation okay , so definition is , unable to perform any part of their normal occupation , and they 're not following any other gainful employment .
[JT3PSUNK]
It 's the same as the P S P [UNCLEAR] was n't it , basically .
[PS4SX]
The [UNCLEAR] of premium and the [UNCLEAR] that 's right , that 's right .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Erm , yes , [UNCLEAR] premium , yes .
[JT3PSUNK]
[PS4SX]
So in other words , we 're saying if they 're off sick , erm , they decide to go out and , you know , do something else to earn some money , then they would n't be able to claim under their policy .
[JT3PSUNK]
Mm .
[PS4SX]
Okay . They 'd only normally be happy to do that , if they did n't have the policy in the first place , would n't they . You know , if they could n't go and be a brick-layer , but they could sit at home , and you know , stick stamps on envelopes , or whatever , earn some money , then they might have to do that because they have n't got this plan . They 've got a Health Master , they 're off sick , they can claim on the plan .
[JT3PSUNK]
How do they er , work that out for a housewife .
[JT3PSUNK]
As regard to sex .
[PS4SX]
Housewife has their own definition .
[JT3PSUNK]
ah right .
[JT3PSUNK]
[PS4SX]
Moving swiftly on . Housewives definition she must be confined to her home , or that of a recognised medical institution . So the doctor 's definition must say , yes , she 's confined to home , because of , the incapacity , whatever it may be , or she 's actually gone to a recognised medical institution , hospital , nursing home , whatever it may be .
[JT3PSUNK]
So a chopped off finger 's not good enough .
[PS4SX]
Correct . Unless she says she ca n't open the front door I do n't know
[JT3PSUNK]
[PS4SX]
Okay , so it 's confined to home , or a recognised medical institution .
[JT3PSUNK]
Yes , it is .
[JT3PSUNK]
Just , just as a matter , a matter interest and that ,
[JT3PSUNK]
Sorry
[JT3PSUNK]
Just as a matter of interest , how would that relate to to the er , claim for the housewife , who had had a finger amputated .
[PS4SX]
that was the florist .
[JT3PSUNK]
Er , fl florist , rather . Oh , yes , sorry ,
[PS4SX]
Yes .
[JT3PSUNK]
Yes , sorry . We 're talking about [UNCLEAR]
[JT3PSUNK]
So they 're going off their trolley [UNCLEAR]
[PS4SX]
Okay , [UNCLEAR] clear on the two definitions .
[JT3PSUNK]
Yeah .
[PS4SX]
Normal occupation , unable to perform any part of it . Not being paid by anybody else , and the housewife , you know , that are not able to leave home , or eventually in a hospital . Yeah , happy on the two .
[JT3PSUNK]
Yeah .
[PS4SX]
Jolly good . What 's the minimum term of a plan .
[JT3PSUNK]
No minimum
[JT3PSUNK]
No , no .
[JT3PSUNK]
No set minimum ,
[PS4SX]
Absolutely wrong .
[JT3PSUNK]
Oh dear .
[PS4SX]
Ten years .
[JT3PSUNK]
Oh .
[PS4SX]
Minimum of ten years for a plan .
[JT3PSUNK]
Is it ten years .
[PS4SX]
Could be maximum .
[JT3PSUNK]
retirement , I 'd say .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
of what age .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Six sixty for female , sixty five for male .
[PS4SX]
Sixty-five regardless bearing in mind we 've now offered women the opportunity to earn more money from the year two thousand and ten , and not retiring until sixty-five .
[JT3PSUNK]
[PS4SX]
There 's equality for you . So anybody , male or female could have a plan up until their sixty-fifth birthday .
[PS4SY]
So you would take out a plan , you would n't specify the term necessarily , would you .
[PS4SX]
Yes , you would . You 'd write it to coincide with your anticipated retirement age .
[JT3PSUNK]
To to retirement age , yes , yeah , yeah .
[JT3PSUNK]
Okay , now generally , you 're gon na find , I would have thought , that you 're not going to get many people wanting to retire much below fifty-five .
[JT3PSUNK]
Yeah .
[PS4SX]
There will be some . Okay , but again , a very small minority . But the actual plan 's , erm , scope , if you like , can only allow you to write the plans to finish between fifty-five and sixty- five , the client 's age .
[JT3PSUNK]
Yeah .
[PS4SX]
So if the client says , I want to , I 'm gon na pack up when I 'm fifty , you write the plan to finish at fifty-five .
[PS4SY]
You 've got to start it at forty , the max you know , the last date , is n't it .
[PS4SX]
The last date would be , yes .
[PS4SY]
Yeah .
[PS4SX]
But I mean , your looking at a twenty , thirty year old now , who says I 'm gon na be packing up when I 'm fifty . Yes , you actually have to write the plan to fifty-five . When he gets to fifty , if all is well , and he wants to pack up , you just cancel the plan . Simple as that , cos this plan , is like a sort of pay as you go type plan , I mean , you 're not building up huge cash reserves that you gon na lose out on , by cancelling early ,
[PS4SY]
Is there any residual value ?
[PS4SX]
There is , but it 's going to be very very small .
[PS4SY]
Yeah .
[PS4SX]
Because all of the money , is you , is basically to ke provide a level of cover ,
[PS4SY]
Yeah .
[PS4SX]
it 's not like a Cover Master Living Assurance , where you building up excess cash funds at the same time .
[PS4SY]
Mm .
[PS4SX]
Okay , ninety , ninety-five per cent of the premium is actually paying for the level of cover .
[PS4SY]
Mm .
[PS4SX]
So you 'll find when you look at the premiums , they are considerably lower than those of the other plans .
[PS4SY]
Mm .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Can [UNCLEAR] for business purposes .
[PS4SX]
It can from , in situations where the employer wants to take one on the life of the employee .
[JT3PSUNK]
But subject to the same minimum and maximum criteria .
[PS4SX]
Yes . Oh , yes . Sorry , was that [ANONYMIZATION]
[JT3PSUNK]
Just gon na say it is a life assurance policy
[JT3PSUNK]
[UNCLEAR] normally competitive in er , in er , [UNCLEAR]
[JT3PSUNK]
Yes .
[JT3PSUNK]
So it does have er [UNCLEAR]
[PS4SX]
Yes , it does .
[JT3PSUNK]
[UNCLEAR] you know , over about five [UNCLEAR]
[PS4SX]
How old to have one ?
[JT3PSUNK]
Seventeen next birthday , yeah .
[PS4SX]
Seventeen next birthday , yeah . Lots of people , a lot of people start work at sixteen , providing they 've got an income . Seventeen next birthday , up to a maximum , obviously of fifty- five , because of the ten year rule , to sixty-five . Seventeen next birthday , minimum . Fifty-five next birthday , maximum .
[JT3PSUNK]
But it 's , it 's non-qualified now , is n't it .
[PS4SX]
Correct .
[JT3PSUNK]
So you do n't need the ten year term here .
[PS4SX]
Not for qualifying rules , no .
[JT3PSUNK]
No , that 's for building up lumps of cash .
[PS4SX]
It 's basically , I mean , you know , who 's really gon na want one for less than ten years .
[JT3PSUNK]
Yeah .
[PS4SX]
You looking at the majority of clients are all gon na be ,
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
to forty or lower , I would have thought for this sort of plan , the majority .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
Is n't five years a normal , more of a normal for er , er , business purposes .
[PS4SX]
Not with ours .
[JT3PSUNK]
No .
[PS4SX]
[JT3PSUNK]
Well , that 's what I thought , yeah .
[PS4SX]
And you 'd be right Okay , the availability , we 've looked at Joint Life [UNCLEAR] , Joint Life First Claims , Life of Anothers , Single Lives . What sort of benefit would [UNCLEAR] claim be written on .
[JT3PSUNK]
Single life .
[JT3PSUNK]
Single life .
[PS4SX]
Single life only , is n't it . Because it 's one person , one contract , it 's based on me and my salary , or , the wife as a house-wife , or house-husband , of course , if the wife 's working
[JT3PSUNK]
House-person , indeed .
[PS4SX]
House-person , indeed .
[JT3PSUNK]
[UNCLEAR] away from that one .
[PS4SX]
Okay , bearing in mind single life , does include a life of another , and the only time we can use that life for another , is the one we mentioned there with [ANONYMIZATION] where the employer wishes to take a plan on the life of the employee . No key man basically , we 're looking at there . You got a business partnership wan na protect one of their directors , one of their top producers , or whatever it may be , they can take a plan out , on the life of their employee so again marketing here , he 's looking at companies as well as individuals . They want to protect their individuals , who perhaps at the moment they ca n't afford to pay a salary if the guy 's off sick .
[JT3PSUNK]
Right , sure .
[PS4SX]
This would do it for them , would n't it . All they 've got to pay now is the premium , not the price .
[JT3PSUNK]
Would it be competitive , though .
[PS4SX]
Very .
[JT3PSUNK]
About to what sort of numbers , you know .
[PS4SX]
Pass .
[JT3PSUNK]
Ah , sorry .
[JT3PSUNK]
Ten , I would think .
[JT3PSUNK]
Competitive to what ?
[JT3PSUNK]
Well , wh [UNCLEAR]
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Oh , yes .
[JT3PS001]
From an employer 's point of view , would n't that be er , better if they had a key man insurance under something like erm , well under a Cover Master , for example , because if he was a long term em employer
[JT3PSUNK]
Yeah , you 'd want [UNCLEAR] you want , you want [UNCLEAR]
[PS4SX]
Yeah , but that only pays out on death or terminal illness , is n't it , this is gon na pay out if he 's , falls off a ladder .
[JT3PSUNK]
You want life assurance [UNCLEAR]
[JT3PSUNK]
Yeah , yeah . [UNCLEAR]
[JT3PS001]
But , but , but from the em from the employers point of view , what he stands to lose if that person 's away from work , I mean , all all all the er , chap 's gon na lose is his , his income so , if he was doing it this in his own case , he would be looking to replace .
[PS4SX]
[ANONYMIZATION] can you hold on a minute . Sorry .
[JT3PS001]
He would be looking just to replace his salary , whereas to the employer , the loss to the employer would be considerably , would be considerably more , could n't it .
[PS4SX]
So what would Cover Master give the employer then ?
[JT3PS001]
I
[PS4SX]
If he 's off sick .
[JT3PS001]
Well well , Co Cover Master , would erm , would would give , it would provide it up to the indemnity which the er ,
[PS4SX]
[UNCLEAR]
[JT3PSUNK]
Sum assured .
[JT3PSUNK]
Yeah .
[JT3PS001]
Oh yeah , yeah , but or , yeah , no , that 's right , [UNCLEAR] Cover Master [UNCLEAR] yeah .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
If , if I 'm an employer , and I ca n't afford to pay you if you 're off sick ,
[JT3PSUNK]
Yeah .
[PS4SX]
A , you might not want to come and join my company in the first place
[JT3PS001]
Right .
[PS4SX]
B , if you 're off sick , you 're not going to get any money .
[JT3PS001]
Right , and also the
[PS4SX]
But , if this contract says , you know , I can offer you a sickness plan if you 're off sick , and I 'll be giving you money because of it .
[JT3PS001]
Yeah , no , I I see , yeah .
[PS4SX]
Yeah .
[JT3PS001]
Yeah , okay .
[PS4SX]
Yeah , but bearing in mind erm , point there as well , you 'd also need things like Cover Master Living Insurance , to give a lump sum if the client , if that person died
[JT3PSUNK]
[PS4SX]
because they might need to bring someone else in to replace them .
[JT3PS001]
That 's right , yes . But this particular cover 's obviously outside the scope of Cover Master ,
[PS4SX]
Oh , yeah . Cover Master pays out when you die .
[JT3PS001]
Of course , yeah .
[PS4SX]
This pays out when you 're off sick .
[JT3PS001]
Yeah , yeah .
[PS4SX]
Yeah . Make sure you 're clear of the distinction between the two
[JT3PS001]
Oh yeah , I am am there , sorry , I was n't
[PS4SX]
Yeah , ones like that .
[JT3PS001]
That 's right .
[JT3PSUNK]
[PS4SX]
Ones like [UNCLEAR]
[JT3PSUNK]
[PS4SX]
Okay , minimum premiums , much lower , as we said , than the other two plans , because it 's not building up cash residual values . Twelve pound a month minimum premium , or a hundred and twenty if they 're paying it annually . And that does include a policy fee
[JT3PSUNK]
Which is .
[PS4SX]
Two pound fifty-nine
[JT3PSUNK]
That Cover Master ? Do you not get the same benefit for hundred and twenty pound per annum . Is it low .
[PS4SX]
Yes , that 's right . If you 're paying , if you the benefit you want cost twelve pound a month . By paying a hundred and twenty grand you would n't get it , because you 're not paying the equivalent ,
[JT3PSUNK]
Yeah .
[JT3PSUNK]
Yes .
[JT3PSUNK]
Worth a try .
[PS4SX]
So if this was my second policy you sold me , and I wanted a minimum premium contract , how much would the minimum premium be ?
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Brilliant . So that 's nine sixty , yeah Remember that little rule , spoke about the other day . The client takes out a second application , and they want it on minimum premiums , they actually get it for eighty per cent of the current value of the minimum premium . [UNCLEAR]
[JT3PSUNK]
What 's the , what 's the minimum time , should you [UNCLEAR] an existing policy holder , to
[PS4SX]
No , minimums , maximums . [UNCLEAR]
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
So providing they 're an existing client , or this is their second application with you tonight .
[JT3PSUNK]
Right , right , oh right .
[PS4SX]
and it 's on minimum premiums , you 've got a little bit of a discount there , but again , bearing in mind nine pound sixty might not buy them the cover they want . Yes If it was something like a housewife , if you sold the husband and wife , let's say , a Cover Master or Living Assurance , or the husband 's Health Master , and the wife now wants a Health Master , then nine pound sixty might be enough to give them the maximum benefit . Rather than paying twelve pound for it .
[JT3PSUNK]
What , he 's got a Cover Master .
[PS4SX]
Any plan
[JT3PSUNK]
any plan
[PS4SX]
As I say , providing this is the second , does n't matter what the first one was .
[JT3PSUNK]
Right .
[PS4SX]
Yeah
[JT3PSUNK]
Including pensions .
[PS4SX]
Any plan
[JT3PSUNK]
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Which was , any plan of ours .
[JT3PSUNK]
So they 're not getting twelve pounds worth of cover for nine pound sixty .
[PS4SX]
No .
[JT3PSUNK]
No , no , no .
[PS4SX]
No again bearing in mind you get pound for pound value whatever you pay in that would dictate what you get out .
[JT3PSUNK]
Minimum premium [UNCLEAR]
[PS4SX]
[UNCLEAR] it 's not very many people who would qualify for the minimum premiums .
[JT3PSUNK]
Yeah .
[PS4SX]
They 're very lo , they 're young people , low levels of cover , or indeed a housewife
[JT3PSUNK]
Yeah .
[PS4SX]
because of the very low level of cover . Right .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
So how long do you think someone 's gon na be off , before we 'll actually start paying out .
[JT3PSUNK]
Twenty-six days .
[JT3PSUNK]
Tw or
[JT3PSUNK]
No , no .
[JT3PSUNK]
that 's what you think So if it was lower than that , would you buy one ?
[JT3PSUNK]
Yeah .
[JT3PSUNK]
Four weeks .
[JT3PSUNK]
[UNCLEAR] put four weeks .
[PS4SX]
There are four choices
[JT3PSUNK]
Ah .
[JT3PSUNK]
The earliest of which is four weeks .
[JT3PSUNK]
Four weeks .
[JT3PSUNK]
Thirteen weeks .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[PS4SX]
There are four choices the client can choose from . Again depending on what they 've currently got cos again we 've got to dove-tail this plan into any current arrangements that they 've already got . So if they 're play paid by their employer , for , you know , six months full salary , they 're not gon na want one of these , kicking off after four weeks , are they . Well , they might do , but they ca n't . The golden rule of this type of plan , in fact , there 's quite a few , the first one I really to want you to , just take on board , is that you can not be better off financially , by claiming under this policy , than you were when you were actually at work . So you could n't have this plan paying out after four weeks , and at the same time , you 're still getting paid by your employer . It 's gon na be one or the other . So we 've literally got to dove-tail this into whatever other current arrangements they have , including any other P H I they 've already got .
[JT3PSUNK]
So this will only come into operation as soon as , erm , it 's completely stopped .
[PS4SX]
Correct .
[JT3PSUNK]
So not , it does n't come into operation when their salary drops to half .
[PS4SX]
Well , again , it depends on how you set this plan up .
[JT3PSUNK]
Right .
[PS4SX]
cos the client might be in a position of saying , well , after six months , I 'm down to half salary , so you might have sold this plan , to pick up the other half ,
[JT3PSUNK]
Mm .
[PS4SX]
at the six month stage .
[JT3PSUNK]
Right .
[PS4SX]
So they 're getting half from the plan , and half from their employer .
[JT3PSUNK]
So it can b
[PS4SX]
So they 're not better off , are they , they 're the same .
[JT3PSUNK]
No . So you can , can be split like that ,
[PS4SX]
Yes .
[JT3PSUNK]
so they can then increase at the end of fifty two weeks or whatever .
[PS4SX]
Yeah , I mean , because you 've got a bit of a difficult position there , where you 've got the person let's say they 're paid their salary six months full then it drops to six months half , and after that we know it 's gon na go to zero . What the plan ca n't do erm , is , I suppose , yeah wel , the only way you can deal with that , well , there 's one of two ways , you can set the plan up , erm , for full benefit let's say the salary was twenty thousand so by here you 're getting ten so you set the plan up , in retrospect for the same twenty thousand pounds , but at the six month 's stage you claim half of it yes , and at the twelve month stage , you 're now claiming the full benefit . All that does mean to the client , they 're paying the premium for twenty thousand for that period , that they 'll never ever claim on .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
Mm .
[PS4SX]
Yeah , so there 's a slight disadvantage there .
[JT3PSUNK]
Well , that 's gon na happen any anyway .
[PS4SX]
The other way you could do , is to do two plans . Yes , one that kicks in at six month 's half salary , the other one that kicks in at twelve month 's on half salary .
[JT3PSUNK]
Mm .
[PS4SX]
So you 're then paying the right premiums for the right amount of benefits you 're going to get .
[JT3PSUNK]
Mm .
[PS4SX]
The other one might be more straightforward to do one plan , cos you 've got one policy fee , one policy charge , etc , so there 's that ratio to bear in mind , but the other one might be simpler just to have two plans . Or if they said , well , I can manage on that half until the year 's expired , and then have one plan kick in at fifty two weeks , with the full benefits . Make sense . Understand and happy .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
Is it possible to have t erm , a split plan then , or do you have .
[PS4SX]
the only other way is to do one plan for the full amount , and claim half of it , at the half way stage and then claim the other half then . But again , you know , you 're paying here premiums for twenty thousand pound , but you 're only getting ten .
[JT3PSUNK]
Mm .
[JT3PSUNK]
Mm .
[PS4SX]
So you got ta weigh that up against er , doing two plans , which you 're paying the true cost of the benefits you would get .
[JT3PSUNK]
If you take out two plans , do you get a reduced policy charge .
[PS4SX]
Yes . Oh no , no , not not reduced policy charge , sorry , no . As I say , you 'd be paying two plans , two policy fees , two setting up charges , administration costs etc , so there 's all that to be weighed up with the advantages over , I 've actually got another plan , but I can only claim half of it , for the first six months .
[JT3PS001]
Er , has it ever been considered on Health Master , because , s say , for example , Cover Master you can actually split periods , and levels of sum assured , cos you have the selected period where you 'd have it higher .
[PS4SX]
Yes , yes .
[JT3PS001]
On Health Master , because it 's quite a common thing where employees can be on full pay for six months , then half for the next six months .
[JT3PSUNK]
Would it no not been an idea on something like Health Master to actually have er , a period of six months , where you could claim half of the [UNCLEAR]
[PS4SX]
No , it 's very difficult with that type of contract , because it 's something that you 'd be paying out monthly
[JT3PSUNK]
[PS4SX]
I mean , Cover Master , it 's very simple , say you want , yeah , it 's a hundred thousand arranged for twenty years , and then [UNCLEAR] later on .
[JT3PSUNK]
Yeah .
[PS4SX]
Because this one , you could chopping and changing it all the time , it 's very an administrative nightmare
[JT3PSUNK]
Oh , yeah , I see , yeah , okay .
[PS4SX]
on that , it would be very difficult .
[JT3PSUNK]
How is er , redundancy covered ,
[PS4SX]
No .
[JT3PSUNK]
So what if you 've got one of these plans out , and then your redundant , and then your sick .
[PS4SX]
Right , okay , can I deal with that a little bit later on . Okay , but it does n't pay out on redundancies , it 's just a sickness and accident policy .
[JT3PSUNK]
[UNCLEAR] are n't ya .
[PS4SX]
[UNCLEAR] So choice of deferred periods , four thirty , twenty-six fifty-two . Client 's choice depending on their occupation .
[JT3PSUNK]
[PS4SX]
Okay they might ask for a four week deferred period , but because of their occupation it says , or we say , sorry , we 're not going to give you that . Erm , whilst I don I accept you do n't know what the groups are , at this time , I 'd just like you to make a note of , classes of occupation , one , two and three are the
[JT3PSUNK]
[PS4SX]
Bless you
[JT3PSUNK]
[PS4SX]
Is eligible [UNCLEAR] anybody in group four , which obviously is a high risk occupation , anybody in that group is unable to have a four week deferred period .
[JT3PSUNK]
Well , they all escaped , have n't they .
[JT3PSUNK]
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Anybody in a four week deferre , erm , sorry , anybody in group four
[JT3PSUNK]
Group four
[PS4SX]
can not have four week deferred period So what we 're saying is the risk there is too high , and there 's obviously a greater chance they 'll be claiming at a very early stage Okay , so the client has the choice , say , apart from the group fours , they could be four thirty and twenty-six and fifty-two , but again dove-tailing into what they 've already got . Also taking into account any other P H I benefits we must do as well .
[JT3PSUNK]
If think I 've got this written down wrong , [UNCLEAR] classes of occupation one , two and three can only have a four week deferred period , that 's no
[PS4SX]
Yes , exactly right .
[JT3PSUNK]
That 's right .
[PS4SX]
Group fours ca n't .
[JT3PSUNK]
Can only have a four week
[PS4SX]
No , can have four
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Or thirteen twenty-six or fifty-two .
[JT3PSUNK]
Yeah . It 's only classes of occupation one , two and three can have a four week
[PS4SX]
That 's right .
[JT3PSUNK]
I 've got the order in the wrong place .
[PS4SY]
Or it 's only class four occupation that ca n't have a four week
[JT3PSUNK]
[PS4SX]
Depending which way you 're coming round the corner .
[JT3PSUNK]
[JT3PSUNK]
Do what ?
[JT3PSUNK]
[JT3PSUNK]
How many classes are there ?
[PS4SX]
Ninety-nine , no , there 's four .
[JT3PSUNK]
[PS4SX]
No , there 's four , erm , apart from housewife and those that are declined .
[JT3PSUNK]
Right .
[PS4SX]
They come into one of four
[JT3PSUNK]
Okay .
[PS4SX]
four main categories . [UNCLEAR] paid on disability , and it 's payable from the end of the deferred period until the client recovers , dies or the policy itself expires . So it 's commencing at the end of the deferred period up until recovery , death , or the end of the term of the policy How are most people 's salaries paid generally .
[JT3PSUNK]
Monthly .
[PS4SX]
In arrears or advance .
[JT3PSUNK]
Arrears .
[PS4SX]
In arrears . We 'll keep this the same then , shall we ? Paid monthly in arrears So let's say , self-employed guy , got a four week deferred plan . He 's off sick today , from today , how long will it be before he gets his first cheque from us .
[JT3PSUNK]
Eight weeks .
[PS4SX]
Eight weeks ,
[JT3PSUNK]
Eight weeks .
[JT3PSUNK]
Two months .
[PS4SX]
Yes , cos it 's got to go , four week deferred , then at the end of the four weeks after that , he gets his first cheque , for that four week period .
[JT3PSUNK]
Mm .
[PS4SX]
Yes an important point there , because , we do n't want you to go away thinking , you can tell your self-employed people , you gon na have money at the end of four weeks . At the end of four weeks , they 're eligible to claim , shall we say , then at the end of that four weeks they can then get a cheque for whatever period they 've been off . So it will be actually eight weeks from the day of the illness or accident .
[JT3PSUNK]
Is it a case of claiming it , immediately er , you become sick , rather than saying [UNCLEAR]
[PS4SX]
Oh , yes . Notify us immediately the claim , the accident , the illness , or whatever ,
[JT3PSUNK]
Yeah [UNCLEAR]
[PS4SX]
we can then start the deferred period . cos it could be a case of , you know , waiting twenty-six weeks to tell us , then we might say right , we now start the twenty-six weeks deferred .
[JT3PSUNK]
Do they have to produce a doctor 's note say look , I 've been off for
[PS4SX]
chances are we would .
[JT3PSUNK]
Be flexible .
[PS4SX]
Yes , yeah , but again as soon as it happens let us know .
[JT3PSUNK]
Yeah , but with some of them , how are you gon na now at the outset , whether you 're gon na be off work for
[PS4SX]
You do n't know , but it 's not worth taking the risk of , you know , being wrong .
[JT3PSUNK]
Yeah .
[PS4SX]
You can always say , I 've had this accident [UNCLEAR]
[JT3PSUNK]
Yeah , if it , if it 's an illness , not a simple accident , an accident is probably , or you 've got a rough idea as to how long you gon na be off for .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
So .
[PS4SX]
Yeah but , I mean , yes , I mean , you 've got a cold , you gon na be off , perhaps a couple of weeks .
[JT3PSUNK]
Mm .
[PS4SX]
But if it 's something , you know , more serious than then the the client should be aware from you , that they should be ringing you up at this stage .
[JT3PSUNK]
[JT3PSUNK]
Mm .
[PS4SX]
To say , do I need to . You can then perhaps ha have a word with the underwriter , and say client 's off with this , what do you thinks likely to happen ?
[JT3PSUNK]
Mm .
[PS4SX]
Do n't know , let's be aware of it , get a letter in writing register er , a claim to head office .
[JT3PSUNK]
Get a letter in writing that 's
[JT3PSUNK]
Are we going to cover the underwriting
[PS4SX]
Erm , a little bit , yes . Basically as far as what you need to know at the point of sale , yes .
[JT3PSUNK]
Is is there a guide at all that we can look at [UNCLEAR]
[PS4SX]
Erm it , we 've covered some of it , the rest , er , again , because we 're not looking at such large large sums , you know , as Cover Master for Home Health Checks and things like that , erm , but , basically , no . No , I mean , when we come to it , we 'll deal with it , if you 've still got a question then , I 'll answer that then , but basically , there 's more stringent guide lines with this plan than with any other , so you do n't really need to worry about that . Okay , income payable on disability . We said , as soon as the disability occurs , deferred period kicks in , after that will then start setting of the payment . There is one time when the deferred period wo n't apply . That is on the case of a re-occurring disability . So scenario , clients been off sick for the last six months with a back problem . Six months to a year whatever with a back problem . Okay , go back to work , fully recovered , okay , if within six months of going back to work , they 're off again , due to the same or related condition as the last claim , then we wo n't install , or employ the deferred period , we 'll treat is as a continuation of the previous claim . So money would be paid out basically from day one Makes sense . So if it 's the same or related condition , the deferred period wo n't apply and will carry on , we 'll start paying straight away , providing there 's a loss of income .
[JT3PSUNK]
Does it have a time limit on it ?
[PS4SX]
Six months .
[JT3PSUNK]
Six months .
[PS4SX]
So if within six months of going back to work , they 're off again .
[JT3PSUNK]
Will they still be paid in arrears , [UNCLEAR]
[PS4SX]
Still be paid monthly in arrears , yes , but they qualify from day one , not , you know , four or thirteen weeks later , or whatever it may be .
[JT3PSUNK]
It there a certain number of times that can happen or
[PS4SX]
No , irrelevant .
[JT3PSUNK]
that can continue
[PS4SX]
That can continue , so you could be off work for a couple of months , go back , if within six months you 're off again , claim , go back , if within six months you 're off again , claim , go back
[JT3PSUNK]
Right .
[PS4SX]
Because it would be er , er re-occurring , reoccurring problem .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
But it 's got to be the same problem .
[PS4SX]
It 's got to be the same , or related so if it 's something new , then it will be a whole new claim . But if it 's the same or related condition , we 're saying , it 's a continuation of the claim , rather than stop and start again . But again , there must be a loss of income , because again , there 's the rule , that you ca n't be better off by being off work sick . Okay on that . Re-occurring disability . Make sure you 're aware of that Okay , for affordability levels for the client , we 've got three different levels of plan , that they can choose from . If you relate it to perhaps to something like car insurance , we 've got third party , third party fire and theft version and then a fully comp version . So there 's a cheaper one , a middle of the road , and a one that 's a little bit more expensive . But again , you get what you pay for . Looking at the level plan , which is the basic one base plan and level plan What we 're really saying there with that plan , whatever you set it up for today ,
[JT3PSUNK]
[PS4SX]
will never ever change , unless you change it . So the client wants ten thousand pounds a year , [UNCLEAR] with sickness benefit and it costs , you know , twenty-six pounds a month . Those 'll still be the same figures ten , twenty , thirty years down the line . Unless you change it So whilst it may well represent , you know , a fair percentage of the client 's salary today , ten years down the line , it 's perhaps not gon na represent anywhere near the same percentage .
[JT3PSUNK]
Mm .
[PS4SX]
So it would lose pace with inflation . But again , it 's the cheapest plan , and it 's a plan that today could be better than having none at all . As far as the client 's concerned . But it can be altered as time goes by , if a client can afford extra premiums , their salary allows them to have extra increases , it can be altered , but would nec would possibly want medical underwriting for any future increasing . Okay , so yes , it can be altered but we would want , more than likely , the underwriting to go with it . Which might be a problem if the client 's had ill health in the meantime .
[JT3PSUNK]
But not claimed .
[PS4SX]
Not the claim really would n't make much difference .
[JT3PSUNK]
Right .
[PS4SX]
Whether they claimed or not , is not gon na change our philosophy that wh w would need medical underwriting anyway , whether you claimed or not . Okay , so the level whatever you set up for today , will still be that way , unless you change it . The middle of the road , third party fire and theft , is what we call the increasing benefit plan . Fully comp does n't cover windscreen cover , by the way .
[JT3PSUNK]
[PS4SX]
So if you smash your glasses , it 's down to you So let's say we 've set a plan up twelve thousand pounds per annum benefit , a thousand pounds a month , yes . Erm , all goes well for the first two years , no real problems there , the client is now , had an accident , an illness , sickness or whatever , now needs to claim on the policy . Okay , so , from year two to three , how much are they gon na get per month ?
[JT3PSUNK]
A thousand pounds a month .
[PS4SX]
A thousand pounds a month , that 's what we set the plan up for . Okay , year three to four it 's going to increase by the rate of inflation over that year . So we get to the anniversary of the policy , not the claim , the policy , I just coincide my illness with an anniversary , but on the anniversary of the policy , we 'll look at the policy , where inflation , what 's it done over the last twelve months , let's say it 's gone up by five per cent . So your next year 's payments , or monthly payments , will now reflect that increase in the cost of living . Makes sense .
[JT3PSUNK]
So you your policy could change within one month .
[PS4SX]
That 's right . I mean , if your policy renewal date was December , you 're off in November , you only get one payment at the old rate , and the next one 's at the newer rate .
[JT3PSUNK]
Right .
[PS4SX]
Exactly right , well spotted . But it it 's on the policy anniversary , not the claim anniversary , and that will keep happening providing the client is still off . Yeah , so if he 's off again at the end of that year , we look at inflation , what 's it done , so it would now go up and it would now be , let's say , eleven hundred pounds a month .
[JT3PSUNK]
It 's an insurability option in effect .
[PS4SX]
In effect , that 's right . But only as long as the client is off sick .
[JT3PSUNK]
[JT3PSUNK]
Yeah .
[PS4SX]
Because what happens , as soon as he 's , go goes back to work , it goes back down again , to what would be a thousand pounds for any future claims to start with again . So as soon as you stop claiming , the policy reverts back to what it was initially . All happy on that .
[JT3PSUNK]
Mm .
[PS4SX]
So it 's increasing benefit , it only goes up whilst you 're claiming by the R P I subject to a maximum ten per cent . So if we have galloping inflation of twelve , fifteen per cent , the most you would get is ten Happy on that one . Premiums for that will remain level throughout the contract . There will be no increase in premium even though you gon na get an increase in benefits . So it 's a better plan than ever , also the premiums for this will be higher than the level plan claim , but again once they 're set , they would n't increase , because your benefits are . Sound good . I knew you 'd be enthused . Yeah , not bad .
[JT3PSUNK]
[JT3PSUNK]
Right [UNCLEAR] are n't you .
[PS4SX]
Okay , so the premiums remain level , but the cover potentially will go up on each anniversary whilst I 'm off sick , subject to the rate of inflation , subject to the maximum overall of ten per cent .
[JT3PSUNK]
Does that mean , the maximum of ten per cent , you would n't ever get more than the eleven hundred , or
[PS4SX]
No , maximum ten per cent in any one year .
[JT3PSUNK]
Ten per cent in one year .
[PS4SX]
So if I was off for two or three years then the rate of inflation was high , then it would be ten per cent each those years
[JT3PSUNK]
[PS4SX]
The fully comp , the inflation proof plan Let's say we 've got a yearly increase of five per cent inflation is doing that throughout the policy . Automatically it 's staying , hopefully , if your salary 's going up by the rate of inflation , this will then be matching your salary , year in , year out .
[JT3PSUNK]
Whether you 're claiming or not .
[PS4SX]
Whether you 're claiming or not . Okay , last one it only goes up when you are claiming , this one goes up even when you 're not . So you 'll always know that , if your salary 's gone up by the same level , whenever you claim , it 's gon na be the same percentage as it was today . So even if in ten years , twenty years time , I put a claim , the money I get then , will be the same seventy odd per cent of my salary as it would be today . Yes make sense .
[JT3PSUNK]
Can you increase it in excess of those amounts ?
[PS4SX]
There 's erm , the amount that the plan you have , is driven by the client 's salary .
[JT3PSUNK]
Mm .
[PS4SX]
You can have a percentage of the salary , we 'll look at in a minute . So it depends on whether your at maximum benefits or not allowable .
[JT3PSUNK]
And when can you do that , can you do that at any time .
[PS4SX]
You can increase at any time . If you 're not at maximum already .
[JT3PS001]
So that that is the disadvan , so so wi with this as you say , it 's only on their second one , erm , the increasing benefit plan , the benefits are only increasing when you 're actually claiming ,
[PS4SX]
Yes .
[JT3PS001]
and then , once you 've claimed , it goes back to the original figure .
[PS4SX]
Goes back to what it was at the start .
[JT3PS001]
So , I mean , say in about three or four years time you you 'd have the same level of cover
[PS4SX]
That 's right .
[JT3PS001]
starting point , as you 've got today , then .
[PS4SX]
That 's right , even though your salary may well have gone up quite a bit more than that .
[JT3PS001]
Yeah .
[PS4SX]
But then again , do n't forget on that one , premium is remaining level throughout the plan .
[JT3PS001]
Of course , yeah .
[PS4SX]
This one , the premium will go up each year to pay for the extra benefits . Yeah , so your premium will also be doing this .
[JT3PSUNK]
Is that all linked
[PS4SY]
So the R P I , there 's no maximum on that , is there .
[PS4SX]
Yeah , ten per cent still .
[PS4SY]
Is there ?
[PS4SX]
Benefits , yes .
[PS4SY]
But if the premiums went up
[PS4SX]
No , you 're still limited each year to a maximum ten per cent increase on the plan .
[PS4SY]
Right .
[JT3PSUNK]
[JT3PSUNK]
So
[JT3PSUNK]
So the cost of the premiums will altered as well .
[PS4SX]
No , well , the cost of the premium , is dependent
[JT3PSUNK]
[PS4SX]
on two fac two increasing factors
[JT3PSUNK]
[UNCLEAR] inflation .
[PS4SX]
Sorry .
[JT3PSUNK]
[UNCLEAR] inflation .
[PS4SX]
Inflation is one of th , or yeah , not inflation itself , but the premium will go up by A , the new cost of the benefit what else would it take the new premium rate
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
No .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Yes Two increasing factors , the increasing benefit , the benefit 's gon na go up each year , that 's gon na cost more money , you 're now a year older , that 's gon na cost more money .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
So that 's in addition to the increase driven by the R P I .
[JT3PSUNK]
[UNCLEAR] the R P I .
[PS4SX]
No , it 's driven by the increase in R P I is n't it . This has gone up by R P I ,
[JT3PSUNK]
Yeah .
[PS4SX]
that being the benefit .
[JT3PSUNK]
Yeah .
[PS4SX]
Yeah , because you 've now got extra benefit , you 've now got to increase the premium . So it 's [UNCLEAR] I mean , let's see , you were getting a thousand pound a month , you 're now gon na get eleven hundred pounds a month ,
[JT3PSUNK]
[JT3PSUNK]
Mm .
[PS4SX]
Whereas before , it cost you twenty pound , it 's now gon na perhaps cost you twenty one pound .
[JT3PSUNK]
Right .
[PS4SX]
It 's also got reflect your age , so it might be twenty one pound fifty now .
[JT3PSUNK]
Right .
[JT3PSUNK]
So at some stage , those two lines could meet .
[PS4SX]
Erm
[JT3PSUNK]
Due to the age factor on it .
[PS4SX]
Er , the age factor , you could well overtake it .
[JT3PSUNK]
Yeah .
[PS4SX]
Could n't it , you 'll have , I mean , if you 've got a client who 's twenty , thereabouts , the percentage increase for the age is gon na be very , very low , is n't .
[JT3PSUNK]
Yeah .
[PS4SX]
Somebody who 's perhaps forty , fifty , the percentage increase for the age could be a bit higher . There 's , the older you are , the more it 's gon na cost , the more risk , etc , etc . Whereas at a younger age , the percentage increase for the age , might be , you know , point one of a per cent . Somebody sort of , fifty , fifty- five , it might be two or three per cent , or more . Okay , but you 're buying more benefits , therefore you got to pay for it more
[JT3PSUNK]
Effectively cost of benefit is increasing [UNCLEAR] the R P I .
[PS4SX]
Yes , well I do n't want you to remember that , because it 's not .
[JT3PSUNK]
Oh .
[JT3PSUNK]
No .
[JT3PSUNK]
So there .
[JT3PSUNK]
[JT3PSUNK]
You never know .
[JT3PSUNK]
[PS4SX]
So what drives the premium , what causes it to go up ?
[JT3PSUNK]
[UNCLEAR] benefit [UNCLEAR]
[JT3PSUNK]
The cost and benefit .
[PS4SX]
The new level of benefit and the new age .
[JT3PSUNK]
Yeah
[PS4SY]
So it 's those two factors , that would dictate the new premium . Yes .
[JT3PSUNK]
Mm .
[PS4SX]
Happy on that . So can you afford one .
[JT3PSUNK]
No .
[JT3PSUNK]
[JT3PSUNK]
do n't sound like it
[JT3PSUNK]
Just knocked up quickly an example here , [UNCLEAR] associate , age thirty next birthday , running a plan through till age sixty , [UNCLEAR] sixty-five in this career are you , might be retired by then . Let us write this down just for information . Based on twelve thousand pound benefit , for the thirteen week deferred period , on the inflation proof plan , so it 's the best plan , you 're running it from , for thirty years , on a thousand pound a month guaranteed income if you 're off sick or ill . How much would you pay for that , if that were you , if you were thirty , looking for a thirty year plan , guaranteed to keep in line with inflation , thousand pounds a month . How much would you pay ?
[JT3PSUNK]
About twenty quid [UNCLEAR]
[JT3PSUNK]
Fifteen a month .
[JT3PSUNK]
About twelve pound [UNCLEAR]
[JT3PSUNK]
I 've seen , I 've seen , I 've seen [UNCLEAR]
[JT3PSUNK]
Ten tenner a week .
[PS4SX]
Ten pound a week . See me later .
[JT3PSUNK]
I 'll buy it .
[PS4SX]
Nineteen pound twenty-three per month .
[JT3PSUNK]
Yeah , I was close , though .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Fiver a week .
[JT3PSUNK]
Five pound a week .
[PS4SX]
Five pound a week protects two hundred and fifty pounds a week . Question what would you do without your two hundred and fifty pounds a week ?
[JT3PSUNK]
Mm .
[JT3PSUNK]
Not a lot on a fiver
[PS4SX]
Would you , could you afford to loose five pound to protect two hundred and fifty ? Yes . And that actually includes the policy fee as it was , of two fifty-five , so if you take that out , you 're looking at sixteen pound eighty odd , for sort of , true cost of that cover .
[JT3PSUNK]
Mm .
[PS4SX]
Four pound a week .
[JT3PSUNK]
There 's a [UNCLEAR]
[PS4SX]
Indeed .
[JT3PSUNK]
[JT3PSUNK]
And how big 's the [UNCLEAR]
[PS4SX]
Okay , so it 's not that expensive . Again think of what you 'd lose if you did n't have one . [UNCLEAR] Okay , how much can I have , that 's the question now
[JT3PSUNK]
Wakey-wakey .
[PS4SX]
We said earlier , did we not , that you can not be better off financially by having claiming under the plan , than you did at work .
[JT3PSUNK]
Yeah .
[PS4SX]
Yes , we 've got to accept that fact , so the benefits we get here , are almost going to match your salary . Almost . Okay , first thing we 've got to derive , we 'll do a couple of examples , let's have an employed client , and self employed , because when we start from differs , depending on whether employed or self- employed . They 're employed , we start on their gross salary , gross remuneration , what makes up an employed person 's gross package , gross salary .
[JT3PSUNK]
Basic .
[PS4SX]
So you got salary , basic salary , give me a figure .
[JT3PSUNK]
Twenty thousand .
[JT3PSUNK]
Twenty .
[PS4SX]
Twenty thousand , okay . What else might this twenty thousand pound earner have , that would be included in his gross package .
[JT3PSUNK]
Benefits .
[JT3PSUNK]
Benefits and a car .
[PS4SX]
Benefits in kind , such as .
[JT3PSUNK]
Do n't know .
[PS4SX]
Could be a company car , could n't it .
[JT3PSUNK]
Petrol .
[JT3PSUNK]
Expense allowance .
[JT3PSUNK]
Telephone .
[JT3PSUNK]
Private health .
[JT3PSUNK]
Health insurance .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Okay . Whatever benefits there are , could be luncheon vouchers , uniform , whatever , add those on top of the salary . Let's say we get a figure of , erm , what , three thousand pounds for that .
[JT3PSUNK]
Is there a formula for that ?
[PS4SX]
Yes , there is .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
All on your tax card .
[JT3PSUNK]
Sorry , what 's that last one , you 've listed down
[PS4SX]
P H I .
[JT3PSUNK]
B H I .
[JT3PSUNK]
Oh , P H I , sorry yeah .
[JT3PSUNK]
Just a moment [UNCLEAR]
[JT3PSUNK]
Yes .
[JT3PSUNK]
Will I be , try to sell him that .
[JT3PSUNK]
[JT3PSUNK]
So I did n't [UNCLEAR]
[PS4SX]
There could scheme benefits within the company .
[JT3PSUNK]
Mm .
[PS4SX]
Existing company scheme benefits .
[JT3PSUNK]
Right , yeah , grossed up to that , yeah .
[JT3PSUNK]
What does his income [UNCLEAR] health insurance .
[PS4SX]
Okay , so what we 're saying , we 've now arrived at this person 's gross salary . That 's the figure we want to start from . Happy .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
Yeah .
[JT3PSUNK]
[PS4SX]
Make sure you add those bits up , because he can now really have benefits relating to his benefits in kind , which you 've you 've forgotten , is less money he 's gon na get , because he was off sick .
[JT3PSUNK]
Yeah .
[PS4SX]
Okay .
[JT3PSUNK]
Can he not still keep his company car though , off sick .
[PS4SX]
Yes .
[JT3PSUNK]
So that does n't matter .
[PS4SX]
That 's right . But he 's now drawing , sort of , cash benefits because of it , or extra cash benefits because of it .
[JT3PSUNK]
Is that his bonus .
[PS4SX]
Self-employed person , we want to find their ,
[JT3PSUNK]
N R E [UNCLEAR]
[PS4SX]
N R E what 's an N R E ?
[PS4SX]
Net relevant earnings .
[JT3PSUNK]
Net relevant earnings , indeed . How do we arrive at that figure ?
[JT3PSUNK]
Income
[JT3PSUNK]
[UNCLEAR] gross profit .
[JT3PSUNK]
Income less expenses .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Well if you 're not doing any work .
[PS4SX]
Okay , so let's say that this guy , self-employed plumber or whatever , he 's earned twenty five thousand pounds , in income . What were his expenses ?
[JT3PSUNK]
Twenty-four thousand .
[PS4SX]
Let's say , is five , so he 's got
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
net relevant earnings of twenty thousand in this example , on this [UNCLEAR] and this is one or two situations
[JT3PSUNK]
Mm .
[PS4SX]
where it 's not good news to have a low net relevant earnings .
[JT3PSUNK]
Mm . You ca n't have your cake and eat it .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
We start basing P H I benefits on your N R E , using your example , he has only got one thousand a year ,
[JT3PSUNK]
Yeah .
[PS4SX]
he 's not gon na get a lot of sick benefit , is he .
[JT3PSUNK]
[UNCLEAR] Yeah .
[PS4SX]
What other situation would not help him .
[JT3PSUNK]
Mortgage .
[PS4SX]
Mortgages . Building societies traditionally lend three times your N R E.
[JT3PSUNK]
Mm .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
You 've got an N R E of five thousand here 's your mortgage of fifteen , what do you want live
[JT3PSUNK]
And pension fund in it as well .
[JT3PSUNK]
Second [UNCLEAR]
[PS4SX]
Pension contributions as well another one Okay , so employed we need to know their gross package , self-employed we need to work on their net relevant earnings . Okay , we arrived at those two . The first computation that we 've got to do for P H I benefits , is take seventy-five per cent of those two figures . So we want seventy-five per cent of that
[PS4SY]
And that 's company policy , is n't it er
[PS4SX]
Yes .
[PS4SY]
[PS4SX]
In fact you 'll find that 's across the board with P H I .
[PS4SY]
Yeah . It 's not a st a legal statutory thing , is it
[PS4SX]
There is certainly Inland Revenue limitations in there .
[PS4SY]
Right , so [UNCLEAR]
[PS4SX]
[UNCLEAR] is seventy-five per cent of salary .
[JT3PSUNK]
[JT3PSUNK]
So it 's sixteen thousand .
[JT3PSUNK]
Seventeen two-fifty .
[PS4SX]
Seventeen two-fifty . That 's the first equation , you must it this way , cos any other way will not be accurate . But the first thing you must do , once you know the figure , take seventy- five per cent of it , if it 's up to forty-five thousand and obviously these are . If the client has a salary in excess of forty-five thousand , you still take the seventy-five per cent off the forty-five , but you could then take a third of whatever is over that forty-five . So if your client 's salary was fifty thousand , for example , you 'd have seventy-five per cent of
[JT3PSUNK]
sorry .
[PS4SX]
forty-five thousand , and a third of the other five thousand
[JT3PSUNK]
[PS4SX]
Happy on that one , so you get the higher earners , forty-five thousand and above , whatever 's over forty-five , you can take an extra third of that and add it to , what seventy-five per cent of forty-five is .
[JT3PSUNK]
Is there any upper limit ?
[PS4SX]
Yes . Fifty thousand .
[JT3PSUNK]
Is it .
[PS4SX]
Sor overall maximum benefit level of fifty thousand pounds , so no plan
[JT3PSUNK]
[PS4SX]
could be set up in excess of fifty thousand
[JT3PSUNK]
[PS4SX]
at the outset .
[JT3PSUNK]
I 've gone dizzy .
[JT3PSUNK]
[PS4SX]
So that 's er , no plan will commence with more than fifty thousand Okay , what we 've now got to take off from these two figures is if there any other permanent health insurance benefits the client 's got with any other insurance companies . Okay , so they 've other P H I benefit , that must come off of the equation , because we , otherwise we 'll be paying it as well as another insurance company , which mean he 'll be better off financially , by being off work sick , yes .
[JT3PSUNK]
That could be a short term accident policy , that might pay [UNCLEAR]
[PS4SX]
P H I
[JT3PSUNK]
Permanent .
[PS4SX]
Permanent Health Insurance , that 's not sickness and accident , which would normally be one or two year contract .
[JT3PSUNK]
Yes , so [UNCLEAR]
[PS4SX]
It 's totally separate .
[JT3PSUNK]
Yeah .
[PS4SX]
Okay . What we must then take off is the single person 's state invalidity benefit
[JT3PSUNK]
Sorry , [UNCLEAR] something .
[PS4SX]
Two nine one seven is the , this year 's current state invalidity benefit , single person 's . Fifty-six , ten times twenty-two .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
Do you no , yeah , do you always take the lower figure there , cos it 's a sliding scale , is n't it .
[PS4SX]
That right , two brain 's gone
[JT3PSUNK]
Yeah , that 's right , yeah . [UNCLEAR]
[PS4SX]
Yeah , yeah , so you only ever take
[JT3PSUNK]
three , three , three , sorry
[PS4SX]
Yeah , from
[PS4SX]
Yes , that 's what I was thinking .
[JT3PSUNK]
You only ever take that figure .
[JT3PSUNK]
All right , then .
[PS4SX]
End of story .
[JT3PS001]
[ANONYMIZATION] am I right , in saying , cos yo you say , obviously we 've got to deduct er , any other permanent health cover which might
[PS4SX]
Yes .
[JT3PS001]
be provided by another insurance company
[PS4SX]
Yes .
[JT3PSUNK]
erm , but in that situation , erm , so I understand , yo you 'd actually erm ,
[JT3PSUNK]
[JT3PS001]
it has n't cropped up here , but I understand that in other cases where you 've double insurance from two life companies , that two life companies would split the actual benefit fifty-fifty , so it would n't actually be deducting the whole amount , would it , because Abbey Life would still ha , Abbey Life would still have to pay [UNCLEAR]
[PS4SX]
If you found someone that who had , you know , full cover with us , and full cover with someone else ,
[JT3PS001]
Yeah , yeah , if they had exactly
[PS4SX]
the chances are we 'd pay half each .
[JT3PS001]
Half each , yeah .
[PS4SX]
Yes , so in which case , the client 's now got a whole premium split between two companies
[JT3PS001]
Two companies .
[PS4SX]
which he 's gon na get no benefit .
[JT3PS001]
Yeah , but the main thing is
[PS4SX]
So there 's absolutely no benefit in trying to over insure
[JT3PS001]
No .
[PS4SX]
yourself or this sort of plan .
[JT3PS001]
No .
[PS4SX]
cos you 're not going to get it .
[JT3PS001]
No .
[PS4SX]
Happy with th the working out , then .
[JT3PSUNK]
[PS4SX]
Arriving at the full salary , or net relevant earnings , seventy-five per cent of that , [UNCLEAR] okay , if for over forty- five thousand , you take another third of that as well . That 's the first equation . Stage two , take off any other P H I benefit . Stage three , take off the single person 's state invalidity benefit . Whatever the figure is left , that 's the amount the client can have a Health Master for . Yes , reasonably straightforward .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
[PS4SX]
So if I asked you to calculate one of your own , you 'd be able to do it , yes .
[JT3PSUNK]
Mm .
[PS4SX]
So I 'll rub this off .
[JT3PSUNK]
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
After a coffee break , perhaps .
[JT3PSUNK]
[UNCLEAR]
[PS4SX]
Yes .
[JT3PSUNK]
what a gentlemen .
[PS4SX]
Back here by twelve in fact , if you want , you can come back in earlier and
[JT3PSUNK]
[PS4SX]
We 'll talk about something in general , if you wish .
[JT3PSUNK]
You 've already done it .
[JT3PSUNK]
[UNCLEAR]
[JT3PSUNK]
There 's a lot of moaning and groaning going on , did everyone have a late night , last night ?
[JT3PSUNK]
I do n't know . I just trying to shake this flu that I feel coming on . [UNCLEAR]
[JT3PSUNK]
went down the gym last night , first time in about three weeks .
[JT3PSUNK]
[JT3PSUNK]
Is it a train from here , or is it a tube from here .
[JT3PSUNK]
Tube .
[JT3PSUNK]
Tube .
[JT3PSUNK]
Mm