As the protection landscape changes, Deepak Jobanputra investigates how whole of life cover is becoming more of a necessity
The growing need for whole of life cover
The growing popularity of guaranteed acceptance plans, coupled with the changes that have taken place within society, indicates there is a need for your older clients to be given more comprehensive financial advice.
As well as the traditional reasons, such as legacy planning, paying their IHT liability and covering the cost of a funeral, whole of life plans can be a perfect solution for the emerging needs of older clients, such as later life debt, annuities replacement and later life care:
• The average cost of a funeral service in 2014 was £8,427, which is an increase of over 10% on the previous year (3).
• 30% of retirees find themselves in debt. 19% of retirees have debts of more than £50,000 and almost one in 10 owe more than £100,000 (4).
• 21% of people are still paying off their mortgage into retirement (4).
• Due to recent pension reforms, more people are choosing to access their pension pots early, and thousands have already used up their entire pension pot (4).
• Thousands have already drained their pension pots (4).
Although it is more expensive [than a term assurance policy], whole of life guarantees a payout, so your client can be safe in the knowledge that there will be money life behind for their loved ones
It is important to fully consider all of these needs when talking to your clients, so that you can advise them on protection that meets their needs.
From having a full discussion, you will often find that whole of life cover, and not term assurance or guaranteed acceptance plans, offer the most comprehensive solution.
Deepak Jobanputra is deputy chief executive officer at VitalityLife
Sources:
1. Swiss Re Term and Health Watch Report 2015
2. http://lifeinsuranceforover50.blogspot.co.uk/
3. SunLife, Cost of Dying 2014, The Guardian, 2015
4. Thisismoney.co.uk, 2015
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