There are inevitably occasions when the unexpected happens or misfortune knocks.
The loss of a household’s main breadwinner, for example, through illness or someone passing away can have devastating financial as well as emotional consequences. A sudden death in the family can result in an unexpected and costly Inheritance Tax bill.
Over the years, the financial services industry has developed a range of products that aim to protect individuals and their families from many of life’s vagaries such as illness, accidents, and even death.
As a company that exists to provide clients with a complete wealth management service, I was interested to know how Courtiers helps clients to find the appropriate protection to meet their needs. I asked Graeme Clark, Courtiers Head of Private Clients to explain.
Graeme said that the process of helping clients find the right protection starts at the fact-finding stage of the client journey. “It’s at this stage where we look to identify gaps in a client’s financial planning,” he said. This could be a shortfall in income should the client not be able to work due to ill health, or because mortgage repayments aren’t protected.
Graeme said “the classic example” is a person who’s self-employed or hasn’t got a very generous benefits package at work, where income protection or maybe some critical illness cover might be appropriate.
Protection can also be useful for estate planning, says Graeme. For example, the money from a life insurance policy can often be paid out quickly after a person’s death, avoiding the lengthy probate process, currently averaging two months, which stops executors of a will from dealing with and accessing the estate. With Inheritance Tax (IHT) receipts hitting a record £7.1bn last year, as long as it’s a whole of life policy and written in trust an insurance pay-out isn’t added to an estate’s total assets, which means no IHT is due on it.
After identifying any gaps, Graeme said the next stage is talking to clients about their priorities. It all depends on a client’s situation and what their goals are. “For some people, it might be more important to protect their debt first before investing, while others might wish to focus on estate planning.”
Looking right across the market
When so many online comparison sites and financial services firms are restricted in the choice of products they can offer customers, Graeme was keen to emphasise that when it comes to protection insurance, Courtiers is free to look right across the market. “This hugely increases the choice available to our clients and means there’s a much better chance they can find the protection to meet their needs. It allows us to tailor the product to suit their individual circumstances and requirements.”
I asked Graeme what factors Courtiers Advisers considered when searching for the most suitable cover for a client. “Cost is one of the main drivers,” he said. By shopping around and through their in-depth knowledge of the market, “the Advisers are able to help clients find products that are not only great value for money but are also suitable for a range of budgets while at the same time meeting their protection needs.”
Offering clients the widest possible choice extends to seeking out providers who charge different types of premiums for different products. For example, while guaranteed premiums are initially more expensive than reviewable premiums, the former provide long-term certainty over what customers pay for their cover, explained Graeme.
Finding the right protection products for clients went well beyond cost and ensuring the cover met their needs. Courtiers Advisers also carried out checks on providers to ensure they were financially secure. “We want to be sure they’re going to be around when they’re needed to pay out benefits.”
Levels of service were also important, said Graeme. “We want to be sure that a provider will treat customers fairly and that they won’t dig their heels in and refuse to pay out when they receive a claim.”
Ensuring clients have the right financial protection in place to deal with emergencies, the unexpected, or simple misfortune, as well as for effective estate management is an integral part of the service Courtiers provides to clients.
If you’d like any further information about how Courtiers can help you find the most appropriate protection, please contact us, or speak to your Courtiers Adviser.
The main types of protection available via Courtiers
Term insurance provides life cover over an agreed period of time. If you die during this period, your policy pays out a lump sum. This type of insurance is often useful to provide financial security for dependants.
Whole of life insurance
Whole of life insurance gives you cover for your entire life. When you die a lump sum can be used to pay off your debts or it can be left for someone else such as loved ones or dependants. Some whole of life policies include an investment element.
Private health insurance
Private health insurance is designed to cover the cost of private medical treatment for ‘acute conditions’ that start after a policy begins.
Family Income Benefit
Family income benefits pays out a tax-free regular income until the end of the term if you die or are diagnosed with a critical illness. Premiums are generally less than normal term insurance.
Key person insurance
This type of insurance is designed to protect businesses when someone who is key to the operation of the company dies or becomes unable to work due to ill health. Its purpose is to help a business survive the loss of that person.
Renewable term insurance
Renewable term insurance allows you to extend your existing life insurance cover without having to requalify for new coverage.