A SIMPLE BUSINESS BOOST.

Transcription

1 GROUP PROTECTION ADVISER GUIDE A SIMPLE BUSINESS BOOST. Group protection is a growing area in financial services. It offers an opportunity to widen your proposition, and this guide will help you take full advantage. This is not a consumer advertisement. It is intended for professional financial advisers and should not be relied upon by private investors or any other persons.

2 A GROWING MARKET Group protection total premiums have increased by almost 30% since % increase ,529m ,678m ,814m ,957m Source: Swiss Re 2015 Group Watch. WITH LOTS OF POTENTIAL. Less than three in ten employees have any group protection Group Life Group Critical Illness Group Income Protection 21.7% 1.19% 5.23%

3 BOOSTING AND PROTECTING YOUR BUSINESS. Some of your business clients may already have some group protection. These policies need regular reviews and are a great opportunity to begin a conversation, possibly adding more cover or including more staff. Those who don t have group protection yet may think it s too expensive or aren t aware of the benefits to employers. That s where you can help! Adding group protection to your proposition could help protect your business customers and grow your business. Helping you introduce group protection Auto enrolment Pensions must be offered by all employers so adding other products can make a benefits package stand out. Group protection uses similar information to pensions, making schemes easier to set up. Have you discussed salary sacrifice? It helps employers to offer more employee benefits at no extra cost and employees can save money. Private Medical Insurance (PMI) Your client understands that health-related benefits are attractive to staff. Group protection provides employees with financial protection should the worst happen, not just paying for treatments. Also, our Group Income Protection s early intervention and rehabilitation support could help employers avoid claiming on their PMI and save them money at renewal. Business Protection Your client understands the importance of directors and key staff, and may have protected the business against their death or critical illness. But are their families covered? Including group protection can make your client s benefits package more attractive to the top talent they need. Commercial or General Insurance Your client understands the need to protect their business assets and cover their liabilities. Employees are also key business assets. It costs time and money to train and develop people, so losing them can be a big setback. Providing a financial safety net can help boost your client s ability to recruit and keep the staff they want.

4 DEVELOPING YOUR GROUP PROTECTION OFFER. A competitive job market can make it harder to attract people, and the costs of replacing a leaver make it even more important to retain the right staff. The group protection solution Group protection is an employee benefit that can help employers attract and retain the right staff. It typically costs around 1% of payroll or less, depending on the type and amount of cover chosen; and can be included within a benefits package at no extra cost. The growth opportunity for you Swiss Re Group Watch 2015 called for more adviser engagement in explaining the issues and the options for businesses. We ve produced this guide to encourage this process, and are committed to supporting advisers in developing the group protection market. Visit our website to see the support material available. Key products Group protection can make a huge difference to the financial wellbeing of your clients insured employees and families if life takes an unexpected turn. The main products are: Group Life Assurance and Dependants Pensions ( death in service benefits) Pays a cash lump sum, usually tax free, or a dependant s pension, or both when an employee dies in service. Group Critical Illness Pays a tax free cash lump sum when an employee is diagnosed with an insured condition or undergoes an insured specified medical procedure. Group Income Protection Pays a regular income for employees who cannot work due to a defined long-term illness or injury. Benefits start after a minimum period, usually six months, and can be paid until State pension age or up to a set number of years. We can also arrange and, where appropriate, fund rehabilitation support to help employees return to work faster. All of our above products can also be offered to employees as either flexible or voluntary benefits, or in some cases both. Flexible benefits Businesses provide their employees with a standard level of benefits. Employees can top up this cover, within agreed limits, to suit their personal requirements. Long-term insurance arranged through employers now provides 80% of all insured coverage in the UK. Voluntary benefits Employees can choose the level of cover they want from a range of benefits selected by the employer. Employees pay the cost of the cover through salary sacrifice or salary deduction. Source: Swiss Re Group Watch 2015.

5 How much cover should clients offer? Here s what other employers are offering. We ve analysed our whole portfolio, and this table shows the most popular benefit level for each product by scheme size. Most popular level of benefit Group Life (multiple of salary) Number of employees covered ,000 1, x 4x 4x 4x 4x Group Income Protection (% salary) 63% 68% 62% 63% 59% Group Critical Illness (multiple of salary) 2x and 4x 2x 1x 1x n/a Costs less than you might think? Premiums will depend on a range of factors, such as type of benefit, amount of cover and scheme size. TYPICAL COST Group Life 0.15% of payroll Group Critical Illness 0.5% of payroll Group Income Protection 1% of payroll Use our online calculator to get a more accurate indication legalandgeneral.com/gpcalculator It gives quick quotes for Group Life and Group Income Protection schemes insuring employees. How much can you earn? You can charge your client commission or a fee. Commission is added to the premium, and the rate is flexible. Average number of employees covered * Average premium * Typical commission (% of premium) This table shows the average scheme sizes and premiums in 2014, plus typical commission rates for each product. Commission is payable every year of the policy. Group Critical Illness ,559 4% Group Life and Dependants Pensions ,744 4% Group Income Protection ,045 12% * Source: Swiss Re Group Watch 2015

6 MAKING IT EASIER. Our dedicated support and online systems are designed with advisers in mind, enabling you to get quotes and place policies on risk quickly and easily. The faster way to get quotes Competitive premium rates. Quotes guaranteed for three months. Group Protection Calculator get a quick quote for Group Life and Group Income Protection schemes insuring 10 to 500 employees. Just answer five simple questions. Online Quote and Buy perfect for use with your SME clients. Get a full quote in 15 minutes for Group Life and Group Income Protection schemes insuring 10 to 250 employees. Contact us to discuss larger schemes and get a quote: Call We may record and monitor calls. Call charges will vary. Or group.protection@landg.com Easy to complete Usually no medical underwriting. Our online Quote and Buy system has a 97% recommendation rate from users and lets you make schemes live instantly. You re likely to have much of the necessary information already. Our dedicated team can help you complete larger schemes as smoothly as possible. Simple administration and renewal Rates are usually reviewed every two years. We only need annual updates of payroll information. The scheme can be assessed annually with commission paid every year of the policy.

7 GIVING YOU CONFIDENCE. Reassurance for you and your clients We re a top UK provider of group protection cover in the UK, with 85 years experience and knowledge. You can be confident when introducing our group protection products. We looked after more than 4,800 group protection policies and almost 2m employees in Group protection claims paid in 2014 Overall, we paid 97.4% of claims Group Life and Dependants Pension 99.6% of claims paid 220m total value Group Critical Illness 82.4% of claims paid 8.6m total value Group Income Protection 95.0% of claims paid 39.8m total value We also arranged and funded rehabilitation treatments worth 4.6m. All our products include a comprehensive Employee Assistance Programme. We re the only group protection provider to offer this free benefit with all our products, and can even include employees not in the scheme.

8 WE RE HERE TO HELP. Our specialist group protection team is on hand to help you and your business capitalise on potential opportunities We may record and monitor calls. Call charges will vary. legalandgeneral.com/workplacebenefits/advisers/protection Register for our newsletter and keep up to date on group protection matters, just your details to: Legal & General Assurance Society Limited Registered in England and Wales number Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered office: One Coleman Street, London EC2R 5AA. Q /15