Clueless

kingstreet

I expect the IFA is trying to prepare for coming to see you?

It's very difficult to come to someone's home fully prepared to discuss protection issues without some input from the potential client. There are so many different options, I'd probably look to sit down and chat through them with you first, then come back and present a solution which;-

a) reflects your protection priorities
b) meets your budget and affordability
c) maps out how you intend to approach unaddressed needs in the years to come.

If he is coming a long way, he may be trying to pre-empt your needs by compiling his quotations in advance, hoping you'll "sign-up" on the night. Not the smartest move if he baffles you and makes you feel like going elsewhere...

kingstreet

Bogbean wrote: »

Hi and thank you.

Yes I must say that we really don't know what to think or where to start. We don't have enough spare to pay for everything and are finding it difficult to know how to prioritise. I try to strike a balance between planning for a future which never comes (seen too many young deaths as a nurse) and being sensible in case I make old bones but am not sure here whether serious illness is better than critical etc. I am aware that many people turn out not to be covered by their policies but I don't know if that's because they have gone for cheapest options or whether these policies rarely pay out.

It fries my brain to be honest as just not an area I know about although I do of course have the nouse to check the facts and not sign up blindly. It's just hard to decide on these things.

I'm very very grateful for advice from you all. Thanks, happy for more if you have it too!

Ignore all the detail and technical jargon you see/hear and think about what you feel you need and what's important to you.

- What happens if either of you die?
- What happens if either of you get a serious/critical illness and don't die?
- What happens if either of you are unable to work due to illness or disability?
- What happens if either of you lose your job?

Once you have an idea of the answers to these questions, establish what you have to protect these issues, such as employer benefits and existing insurance.

For example, unable to work due to illness? I have six months full pay, followed by six months half pay. I need to think about what might happen after that.

Now for the difficult bit. You have to put a priority on each of these needs. Only you can determine what you most value. If the thought of leaving your family nothing in the event of death wakes you up in the middle of the night, life cover would be priority one. However, if losing your job feels worse to you, unemployment cover should get a higher priority.

Address priority needs first, less important ones later, according to your budget. If you can afford to meet some of the need now - do it. You can always add to it later. 50% of something is better than 100% of nothing!

Feed back all this to your IFA and he should be able to come up with a plan as I mentioned earlier...

Bogbean

Hi Kingstreet, many thanks for that. Below is his latest reply. I should add that I have no reason to doubt his integrity or besmirch him, I'm just way out of my comfort zone. I will see how tonight goes and feed back. Thanks again.

I have recommended a Mercedes type solution (Not top end Rolls Royce) but not budget KIA.

You decide what and how much you want to take, my duty as an adviser is to just advise you on what you need to take to
cover your liabilities.

If you don’t take any of the recommended plans then in my suitability report I reference that I have made certain recommendations
To you but you have declined to take them up at that point in time.

Remember you can add to the cover as and when you see fit, most people however never give it a second thought until it is too late
e.g. after an illness has occured etc. They are then uninsurable.

The quote you have got from the internet doesn’t show me the provision of the contract.
However internet companies do not provide advice and so reduce the commission taken to get the cheapest premium.
They make their money by complete 1000’s of these policies every year.
Interestingly their statistics (Not Cavendish in particular but Internet companies) show that they loose 65% of these
policies in the first 2 years as IFA’s like me have to put right what has been completed incorrectly.

We’ll put the meat on the bone tonight and leave it a week for you to decide on what action you wish to take.

dunstonh

You decide what and how much you want to take, my duty as an adviser is to just advise you on what you need to take to
cover your liabilities. <snip>

That is correct. Yes you have to be told what you should have to cover needs. However, once you say you cant afford that (which is quite normal), you then discuss with the adviser what is important to you and the adviser should then adjust their recommendation to fit within your budget. At all times the adviser should give advice and not put it in your hands to decide (although in reality, a little bit of that does go on if you feel one option is less valuable than another).

Interestingly their statistics (Not Cavendish in particular but Internet companies) show that they loose 65% of these
policies in the first 2 years as IFA’s like me have to put right what has been completed incorrectly.

That is also correct to a point. Internet applications do have poor persistency (how long they stay in force). They also tend to have higher rates of non-disclosure as well which has lead to more refusals or redraws. Some companies have pulled their product from internet sites because of this. Most IFAs will tell you that we have had to correct online applications (most common is an individual thinking that TI cover is the same as CI or they have bought yearly renewable term assurance when they thought they had level term assurance with guaranteed premiums or just using totally unrealistic sum assureds or policy terms, such as only going 5 years to cover a 25 year mortgage). However, they would not account for all of the 65%. Recession would be some of it, change in circumstances some more etc.