Income Protection. Karen Gallagher Business Development Manager

Transcription

1 Karen Gallagher Business Development Manager

2 THE NEED FOR INCOME PROTECTION

3 Worker s confusion over sick pay 30% of workers believe their employer will provide sick pay indefinitely

4 Over- optimism re: State Benefit 25% believe they could survive on the State benefit Married with 2 Dependants: Self Employed: 19k NIL p.a.

5 Income is largest asset for most Total Earnings to Retirement 3.5m 2.8m 1.8m Note Based on annual salary today of 70k Inflation of 2% per annum Retiring age 65 Age 30 Age 40 Age 50

6 Sold as Just Another Insurance INCOME Mortgage(s) Pension Life Cover Savings Income Protection

7 But is it the Most Important? Bills Mortgage Car Sports & Social YOUR INCOME Pension Children Holidays Investment Loans

8 Probability of Disability One in six Irish people will be out of work for more than 6 months during their working life

9 THE PRODUCT

10 Income Protection - Product Policy that pays you an income if you re out of work for more than 13, 26, or 52 weeks Continues payment until return to work or retirement age If you can t do your own occupation Any illness, accident or injury Premiums can be guaranteed Full tax relief on premiums at marginal rate Hospital Cash after 8th day

11 Peace of mind. Guaranteed premiums Waiver of premium Help to get back to work if you need it Rehabilitation Benefit Proportionate Benefit Linked Claims Health Claims Service Ability to increase your level of cover by up to 30% every 3 years - Guaranteed Increase Option Changing Occupation

12 Benefit Limits 75% of income, less single person s social welfare amount ( 10,286 per annum) to a maximum of 175,000 Max Benefit Calculation 75% of first 125,000 plus 33% of balance to maximum of 175,000 less state single person disability benefit less any continuing income

13 Premium depends on. Guaranteed Reviewable - 5th anniversary & every 5th after that - Level or Indexing options - Occupational Class e.g. 1 Office worker 2 Salesperson driving 3 Vet 4 Carpenter Length of deferred period - 13, 26 or 52 weeks Ceasing age - 55, 60 or 65

14 Value of cover Male Age 36 n.b, to age 65, Class 1, Deferred Period 26 weeks, premium and benefit escalation Benefit: 62,400 p.a. ( 1,200 p.w.) Gross premium p.m. Net premium p.m. Total Cover: 3,948,419

15 Position the cover Deluxe cover - not everyone can get it Depends on your occupation, health history Position this with your client Manage your client s expectations

16 Underwriting Payout in 90% of claims so underwriting is essential at the start of the process Get as much information from the client as possible Use point of sale questionnaires for known conditions Be aware of the underwriting limits and prepare your client for the medical requirements Handle exclusions and ratings up front Get comfortable with the underwriting process

17 THE MARKET

18 Market Opportunity Embryonic market in Ireland 5% of the protection market. Approximately 10% of adults hold income protection cover Strong growth over the last 4 years. Individual Income Protection - Adjusted AP 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , ,000 - Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q4-2007

19 The need has never been greater Disability on the rise Financial consequences of disability are severe More workers & families financially unprepared Consumers need to take greater responsibility for their personal financial well being

20 What are the chances. We paid out over 15m in claims in 2007 Our average claim period is 5½ years Statistically you have a 1 in 6 chance of being out of work for more than 6 months during your working life You are 3 times more likely to suffer a disability than die during your working life - have you life cover?

21 Why so few have Income Protection? One reason: myths and misperceptions about disability Its not going to happen to me If it does it, won t last long My employer will take care of me I think? It s expensive and won t pay anyway I ll sell my assets and that will keep me going

22 Asset Protection 500, ,000 With IP 300, , , ,000 0 Without IP

23 5 Questions everyone should ask.. 1 What are my necessary monthly living expenses that would continue if my income stopped e.g. mortgage, utilities, food, medical insurance etc. 2 Would my personal savings pay for my necessary monthly expenses - for one month, three months, six months, longer? Have a plan in place for disability 3 How long would my assets last if they were funding my day to day living expenses? 4 What state benefit I m I entitled to? 5 Does my employer have a sick pay plan or long-term disability cover, how long does it pay for?