But this doesn’t mean that they have to indulge in an either/or decision that results in missing out on some essential protection altogether. There is much to be said for splitting what outlay there is available to obtain a small amount of cover from a number of different products rather than opting for a large amount of one.
An adviser who recommends life cover but no critical illness cover could, for example, find themselves with some awkward questions to answer if their client developed a critical illness. The same applies if they recommend critical illness cover but no income protection and their client becomes unable to earn a living as a result of a bad back or stress related condition. Neither condition would be covered under a critical illness plan – unless the problem was so serious that it qualified for a total permanent disability claim – but both would be covered by income protection.
Arranging a small amount of each cover can provide the best of both worlds. The client is protected against a broader range of eventualities and, if they qualify for a pay-out from both covers, the benefits should complement each other well. The regular income from the income protection should hopefully be sufficient to take care of most of the regular bills whilst the lump sum from the critical illness cover could be used to finance one-off costs such as a holiday for recuperation purposes or even minor adaptations to the home that become necessary to accommodate a disability.
Fortunately, protection insurers facilitate the task of arranging multiple products by offering flexible menu-based formats that allow cover to be mixed and matched cost-effectively and with a minimum of hassle.
Such menus can also offer the opportunity to have either level, decreasing or increasing cover and may even allow life and critical illness cover payments to be made as a regular income rather than as a lump sum. Taking advantage of such flexibility can greatly reduce costs. For example, choosing an income as opposed to a lump sum could reduce the premium significantly.
A menu-based product can also help to cater for lifestyle changes such as marriage, divorce,and promotion or moving home by adding or removing covers or, subject to specified limits, increasing or reducing cover amounts on existing covers without having to provide any further medical evidence.
Royal London’s Personal Menu Plan offers a menu that gives access to life cover, income protection, critical illness cover, unemployment cover and waiver of premium. It can also enable total premiums to be reduced by paying only a single plan charge if the client opts for two or more different covers.
But it’s not enough just to have a flexible menu. Providers also need to make the application process as simple and as flexible as possible. That’s why at Royal London we’ve made a change to our application process to remove some of the duplication of effort that previously existed if clients wanted different covers to start at different times or, for couples in particular, they wanted different owners for each cover.
Using our online quote and apply process you can now specify who will own each individual cover instead of having the same owner for all covers within the application. This allows a couple to take out separately owned cover whilst still benefiting from only having one plan charge split across all plans that result from the application.
You can also give each cover a different start date. For example your client may want their family protection to start immediately but the cover for their mortgage to start only when the mortgage completes. Or, if we can accept one cover immediately but another cover needs further underwriting, you can start the cover we can accept straight away instead of having to wait for a decision on all covers. You can even give us a start date for plans you’ve submitted but didn’t know when it was to start at the time the application.
And it’s not just personal protection that this is available for. You can also do all of this with our Business Menu Plan allowing you to provide your clients with cover for their key person, loan and ownership protection needs in one go.
All of this is now available online; saving you time and saving your clients money by only having to submit a single application for all of their needs with no need to call us to start their cover. So the next time you’re recommending a menu plan, why not try our online application process to see just how easy it is to get the cover your clients need.
Ian has worked in financial services since 1984 and has provided technical support and been involved in product development since 1992. He joined Royal London in 2001, initially as technical product manager for Bright Grey, before becoming head of product development & technical support for both Bright Grey and Scottish Provident and latterly product architect for Royal London.