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Why sell protection?

Why sell protection?. David Pope Channel Development Director Legal & General. Why sell protection?. The protection market Reasons to sell protection Selling protection Proof it is worth selling. The market. The protection market - 5 year product performance.

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Why sell protection?

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  1. Why sell protection? David Pope Channel Development Director Legal & General

  2. Why sell protection? The protection marketReasons to sell protectionSelling protectionProof it is worth selling

  3. The market

  4. The protection market - 5 year product performance Total new Critical Illness Cover sales 2003 2007 1,066,262536,143 Total new individual Term Assurance sales 2003 2007 2,136,7381,541,930 Total new Income Protection sales 2003 2007 216,169111,780 Total new Whole of Life sales 2003 2007 230,698219,362 Source: Swiss Re Term & Health Watch 2008

  5. The protection ‘gap’ The protection market- declining sales • Clients • Lack of awareness • Cost • Lack of trust • Advisers • Focus on mortgages • Product knowledge • Clients

  6. The protection market - providers

  7. + The protection market- your opportunity Life Assurance protection gap, 2004-2007, measured by sums assured The protection gap is £2.3 trillion. Life Assurance protection gap (trillion pounds) Source: Swiss Re Term & Health Watch 2008 What could your income share of this £2.3 trillion be?

  8. The market - your clients Males Females 75% 83% Source: Legal & General Value of a Mum 2006 50% of adults have insufficient or no life cover Source: Swiss Re - Term and Health Watch 2007

  9. Reasons to sell protection

  10. Some sobering thoughts… Today in the UK: Protection – some sobering thoughts…….. • Over 1,380 people will die • 2.1 million people are claiming income support • Almost 3 million people are claiming disability living allowance • Over 2.6 million people are claiming incapacity benefit • Over 2.5 million people of working age will be off work for at least 6 months at any one time through sickness and disability Source: National Statistics, 2007 and Department for Work & Pensions, 2008

  11. The importance of protection Mortgage Expenses Child care Savings Pension Luxuries Regular income

  12. The importance of protection Mortgage Expenses Child care Savings Pension Luxuries Mortgage protection

  13. The importance of protection Mortgage Expenses Child care Savings Pension Luxuries Mortgage protection Protection

  14. The importance of protection If you only protect the mortgage you are only hitting 20%of the opportunity Full protection can help protect 100%of the opportunity It’s the Adviser’s job to make the customer aware of what protection they should have and provide recommendations based on their needs

  15. Selling Protection

  16. Selling protection – underpinning financial planning

  17. Selling protection – identifying opportunities The traditional client – an example

  18. Customer lifestyles are changing Selling protection – identifying opportunities The contemporary client lifestyle

  19. Selling protection - loan arranger or an adviser…? • People need protection • People rarely want to buy protection • Protection needs to be sold • People want to buy houses • People need mortgages • Mortgages are sourced and arranged

  20. Selling protection– three big mistakes • No attempt made to sell • Thinking you’ll come across as pushy • Selling attempted in an unconvincing manner

  21. Selling protection - overcoming challenges Present the facts Not seen as a worthwhile purchase Affordability Demonstrate there is a need Build a client and adviser relationship Uncomfortable with the sale Client concerns not understood Attempt to ‘put yourself in their shoes’ Remember…. utilise the product and sales support and training offered by providers

  22. Selling protection – support sales aids Contact our protection sales team for more information on 0845 273 0010

  23. Proof it is worth selling!

  24. The proof - for your clients Death claims Critical illness claims Source: Legal & General Focusing on Family Protection, 2008

  25. The proof - your commission potential Your commission Source: Legal & General Mortgage Protection – The Value of an Hour, 2008

  26. The earnings potential Two life sales plus one life + CIC sale per week = £2,357.89 commission* Two life sales plus one life + CIC sale plus one family plan per week = £2952.50 commission* Three life sales per week = £1014.84 commission* £48,712.32pa* £113,178.72pa* £141,720.00pa* • Based on commission figure of £500 per mortgage sale. (commission varies dependant on house price) *All figures based on a 35 yr old male non smoker, £200k sum assured, over 25yrs (Quote date 20/08/2008). • FPIP benefit of £2,822 per month. • All quotes based on 140% lautro including 10% eUplift And all that calculated over 48 weeks….leaving you time to spend it!

  27. Conclusion • The protection gap • Do your clients need it? • Opportunities • Is it worth it?

  28. Please come and visit us at our stand

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