Help first-time buyers get on the protection ladder

For advisers only Help first-time buyers get on the protection ladder Affordable cover for your clients

Mortgage opportunities. Protect more than just the bricks and mortar. What s inside 1 Helping your clients get on the protection ladder 2 The stakes are high for first-time buyers 3 Who is today s first-time buyer? 4 The need for protection has never been greater 5 What does the ideal protection client look like? 6 Explaining the cost of protection in everyday terms 7 Helping you put protection at the heart of the mortgage sale 8 Keep it simple with Lifestyle Plus

Helping your clients get on the protection ladder First-time protection for first-time buyers. By Q3 2014, the number of loans to first-time buyers was showing an increase on the same period in 2013 1. Perhaps the housing market is beginning to make a recovery. And with so many mortgages being accepted, it can be hard to keep up with protection sales. Now more than ever, first-time buyers are in need of protection for their homes and lifestyles. On average, they ve spent almost 13 years saving a deposit for their investment 2. This could all be at risk if they fall ill. New homeowners normally have the highest loan-to-value ratios and tightest budgets of all homeowners. So if anything did go wrong they would be the first to fall straight back off the property ladder, having only just made it onto the first rung. They need your advice on how to protect their lifestyle and income. At Bright Grey we offer a simple, affordable protection product designed for healthy under-40s. It gets them onto the protection ladder and helps make sure their first home is safe and sound. 3.1 billion the total value of loans advanced to first-time buyers in January 2014 3. Sources: 1 Council of Mortgage Lenders, November 2014. 2 Mortgage calculator on www.moneysavingexpert.com using figures from www.themoneycharity.com. Saving 35,700 (17% deposit for a 210,000 property) in a savings account with an interest rate of 3%. This would take 12 years 9 months, saving 200 a month. August 2014. 3 Council of Mortgage lenders, March 2014. Lifestyle Plus Protection plan 1

The stakes are high for first-time buyers By the time today s first-time buyers have bought their own home they could have saved for a huge deposit, perhaps borrowing from parents or wiping out savings. So what would they fall back on if they became too ill to work and couldn t pay the mortgage? 146,512 the average cost of a first-time buyer s house 1. 258,854 in London 1 29,932 the average deposit for a first-time buyer in the South East 1. 62,050 in London 1 Sources: 1 LSL Property Services plc, July 2014. 2 Lifestyle Plus Protection plan

Who is today s first-time buyer? Let s take a closer look at how the changes in your clients mortgage profiles have changed their protection needs. First-time buyers in 2007 First-time buyers in 2014 Average age 29 2 Average age 31 1 Average house price 158,097 2 Average house price 146,512 1 100% mortgages available Average 82% loan-to-value mortgages 3 In July 2014 a total of 30,200 loans were advanced to first-time buyers, 25% more than the same period in 2013. 4 Now that they re back on the agenda, what s changed for first-time buyers? It used to be that first-time buyers had easier access to 100% mortgages and less to lose. Without the pressure of having to save as hard for a deposit, life went on as normal. The need for protection probably wasn t even on their agenda. With affordability the biggest obstacle to overcome, today s first-time buyer may not be able to pay for critical illness cover to cover their full mortgage loan but they could at least protect their monthly mortgage payments or their deposit that took so long to save for. Nowadays, life s not so easy. Those hoping to dip their toes in the property pool have to bide their time until they ve saved a big enough deposit for an affordable deal. This means they re older than they used to be. Perhaps they ll be buying with a partner, which means there s someone else to worry about. What conversations are you having with your clients? For single clients: Q: How would you cover your mortgage payments if you were unable to work because you were critically ill? Sources: 1 LSL Property Services plc, July 2014. 2 www.creditaction.org.uk, April 2007. 3 Council of Mortgage Lenders, April 2014. 4 Council of Mortgage Lenders, September 2014. And couples: Q: Could you support each other if one of you were unable to work because of a critical illness? Q: If one of you died, would the other be able to keep the mortgage payments going? Lifestyle Plus Protection plan 3

The need for protection has never been greater They say life begins at 40 but the need for protection starts earlier. Buying a home is sometimes the first time many have a need for protection. Because of this, first-time buyers have usually had limited exposure to the protection market. And, because they re younger, they ll often find cover more affordable than people further up the housing ladder 1. The dilemma for most people is that at these times money is in short supply. However, they ve never had a greater need for protection. 54% of 1,312 people asked are concerned about becoming ill, and/or are eager to protect themselves 1. 41% of consumers prefer to get financial advice face-to-face rather than online 2. 17% of the people who claimed for a critical illness with us in 2013 were 40 or under 3. Sources: 1 Mintel, Critical Illness Cover Executive Summary, June 2014. 2 Mintel, Consumers and Financial Advice Executive Summary, April 2014. 3 Bright Grey and Scottish Provident claim statistics 1 January - 31 December 2013. 4 Lifestyle Plus Protection plan

What does the ideal protection client look like? If your clients tick these boxes then Lifestyle Plus will tick all yours. Under 40 Non-smoker Clean life (no complex medical history and not awaiting medical tests) No history of cancer, heart attack, multiple sclerosis, stroke or angina BMI of less than 35 Cover below 200,000 74% immediate online decisions for Life or Critical Illness Cover 3. In 2013, we gave an immediate online decision to more than 7 out of 10 clients who matched this profile 4. But Lifestyle Plus isn t just suitable for your first-time buyers you can also recommend it for larger sums assured, up to 500,000, and older clients, above age 40. For more about the key features of our Lifestyle Plus Protection plan, see the table opposite. What Lifestyle Plus can offer your clients Single life or joint life first event Up to 500,000 of Life or Critical Illness Cover 24 ABI standard definitions (including Total Permanent Disability) 5-40 year term How we pay cover: Level lump sum Increasing lump sum in line with retail price index Decreasing lump sum mortgage repayment guarantee Maximum age when cover ends is 69 You can choose guaranteed or reviewable payments for Life or Critical Illness Cover You can only choose guaranteed rates for Life Cover The plan is reviewed after the first 5 years, then every 5 years after that Payment Cover for Sickness Own occupation 1 year own occupation When we pay waiver of premium (Payment Cover for Sickness) We cover the payments of the plan after a deferred period of 26 weeks Disability definitions Own occupation Working tasks Instant cover Available when taking out cover for a mortgage Read the plan details for the Lifestyle Plus Protection plan for full information. Sources: 4 Bright Grey online decision rates for Lifestyle Plus Protection plans. Our example is based on non-smokers, aged 18-40, with a sum assured up to 200,000, Life or Critical Illness Cover, January - December 2013. Lifestyle Plus Protection plan 5

Explaining the cost of protection in everyday terms Ask your clients how they would manage financially if they became critically ill. Many people have no idea of how little protection could cost and are amazed when they find out how reasonable it can be. How much does a coffee cost these days 2.50 or a little more maybe? Even 2 coffees a week soon mounts up to around 20 a month. And 20 a month could buy enough protection to give your clients some peace of mind that they d be covered if anything happened to them. Of course, it doesn t have to be coffee; often people spend their money on things like magazines and taxis without really thinking about it. To show your clients how life s little luxuries can add up to a whole lot of protection, try our calculator yourself at www.brightadviser.co.uk/lifestylecalculator And for face-to-face meetings where you can t access the web, use our tear-off pads. They re unbranded and left blank for you to use with your clients. 20 a month could buy enough protection to give your clients some peace of mind that they d have some cover if anything happened to them. 6 Lifestyle Plus Protection plan

Personal protection You ve secured your clients the mortgage deal that means they ll soon own their own home for the first time. Now it s time to talk to them about protection. Taking out Life or Critical Illness Cover for the Using the UK s average salary of 26,500 1, full amount of the mortgage could be beyond here are some sample quotes to give your clients budgets right now. But if you your client a rough idea of what protection recommend cover for 6 months or a year s might cost. Once you tell them how little it worth of their salary, you d be protecting could cost to protect themselves, you can them as well as their mortgage if they got really open up the critical illness conversation. a critical illness and couldn t work. Single: Life or Critical Illness Cover (Level) Joint: Life or Critical Illness Cover (Level) Amount Monthly Amount Monthly of cover premium of cover premium Aged 25 Aged 30 Aged 35 Aged 40 Couple Couple Couple Couple aged 25 aged 30 aged 35 aged 40 20,000 6.03 7.91 10.79 15.45 20,000 7.92 10.36 14.38 21.92 26,500 10.05 13.59 19.04 27.82 26,500 10.02 13.26 18.56 28.54 50,000 18.11 24.99 35.57 52.64 50,000 17.56 23.68 33.68 52.52 When you choose the increasing option with our plans there s no initial Adding Payment Cover for Sickness can cost your clients as little as price difference. Your clients only need to accept the increase once 32p a month extra 2. Showing them how little it costs to make sure their every 2 years. And we won t claw back any commission if they don t monthly payments will still be paid if they re unable to work, helps you accept the increase. create a strong argument. Single: Life or Critical Illness Cover with Joint: Life or Critical Illness Cover (Level) indexation no price increase for the first year with Payment Cover for Sickness Amount Monthly Amount Monthly of cover premium of cover premium Aged 25 Aged 30 Aged 35 Aged 40 Couple Couple Couple Couple aged 25 aged 30 aged 35 aged 40 20,000 6.03 7.91 10.79 15.45 20,000 8.24 10.78 14.96 22.80 26,500 10.05 13.59 19.04 27.82 26,500 10.42 13.80 19.30 29.68 50,000 18.11 24.99 35.57 52.64 50,000 18.26 24.62 35.02 54.62 Source: All quotes above based on Bright Grey Lifestyle Plus Protection plan, non-smokers, over 25-year term, August 2013. 1 Office for National Statistics, Annual Survey of Hours and Earnings, 2012. 2 Based on 20,000 Life or Critical Illness Cover for 25-year-old couple. Bright Grey is a division of the Royal London Group, which consists of The Royal London Mutual Insurance Society Limited and its subsidiaries. The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions and is a member of the Association of British Insurers and the Association of Financial Mutuals. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL. PC1473C.0514 Helping you put protection at the heart of the mortgage sale Starting the protection conversation with your first-time buyers. Lifestyle Plus Life or Critical Illness Cover Can your clients afford to be critically ill? Dealing with the cost of protection Once you re covered, you Use this sales aid to show your can clients carry on how enjoying life. little protection could cost. A little bit of cover is better than none at all. If your clients took out just enough protection to cover their salary for a year, it could make critical illness cover more affordable. Use our sample costs sales aid to find out at a glance what cover might cost for your clients before you start the conversation. Protection? No need, the state will look after us The state may not help as much as they might think Could they keep their new home if they became seriously ill? Your clients may not realise what the shortfall would be between their monthly outgoings and state benefits if they were to become seriously ill. Peace of mind for you and your first home Affordable insurance for first-time buyers Client-facing brochure Booklet on protection for first-time buyers This guide helps you show first-time buyers why protection is essential for them in their new home. Budgets are tight and excitement is high but protection needs to come into the equation to make sure they hold onto their home. Magic circle And to overcome these objections and more, why not use our magic circle to personalise your message and reinforce your advice and your brand. So next time a client says they can t afford protection you have the facts to suggest they can. www.brightadviser.co.uk/magic Lifestyle Plus Protection plan 7

Keep it simple with Lifestyle Plus Closing the deal. Selling protection alongside the mortgage can be difficult. When most clients are buying their dream home, the last thing you want to talk about is what would happen if they were diagnosed with a critical illness. But can you afford not to? How would you feel if a client came back to you saying they have cancer and need to sell their home? Even a little bit of cover could be enough to give them time to recover. That s why we believe our Lifestyle Plus Life or Critical Illness Cover could be right for some of your first-time buyers. It was designed to provide affordable cover for clients up to age 40 with sums assured of up to 200,000. Why Lifestyle Plus? You can get a client on risk in just 15 minutes 7 out of 10 applications can get an immediate decision 1 Quick, signature-free online process Choice of level, increasing or decreasing cover Option of Payment Cover for Sickness (waiver of premium) Now with instant cover With our Lifestyle Plus product, commission is only available on a 4-year earnings basis. Go to www.brightadviser.co.uk to quote and apply for Lifestyle Plus Life or Critical Illness Cover. You can find everything you need on our website. Any literature you order before 1pm will be sent out the same day. Sources: 1 Bright Grey online decision rates for Lifestyle Plus Protection plans. Our example is based on non-smokers, aged 18-40, with a sum assured up to 200,000, Life or Critical Illness Cover, January - December 2013. 8 Lifestyle Plus Protection plan

For your share of the first-time buyer protection market, visit www.brightadviser.co.uk/mortgagestreet

First-time buyer protection from Bright Grey T 0845 6094 500 F 0845 6094 522 E help@brightgrey.com A 2 Queen Street, Edinburgh, EH2 1BG W To find out more, get a digital copy of this document, or to quote and apply online, go to www.brightadviser.co.uk/mortgagestreet Bright Grey is a division of the Royal London Group, which consists of The Royal London Mutual Insurance Society Limited and its subsidiaries. The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions and is a member of the Association of British Insurers and the Association of Financial Mutuals. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL. PC2101A.1114