The explosion of internet-based sales and servicing is resulting in
surfing becoming a regular daily activity. Trading online for shares, unit
trusts and now Isas is commonplace.
It is not until recently that protection, the type of business that can
take weeks to process, has made its way on to the web.
Two companies offering this approach in different ways are Friends
Provident and Legal & General.
Friends Provident's needs to be set up on your company website, allowing
your clients to apply online themselves. Legal & Gen-eral's is available
through its website and is designed to be IFA-oriented, with advisers
sitting with the client and talking them through the process.
Of the two, the more accessible is L&G's, which can offer up to
£350,000 of cover with no need for an MAR forlife and critical
illness. The application form is simple to complete and easily understood
by the client who only needs to verbally agree to the IFA that the
information is correct for the application to be valid.
However, caution should be taken not to speed through the application just
to show off and get the client cover. The threat of non-disclosure is never
more prevalent, as it is easier for the clients to forget medical
conditions, with an IFA asking the questions, as opposed to them sitting
down and handwriting the application themselves.
Indeed, our experience shows that the more times you ask a client to
recall visits to a doctor, the more visits they recall. If you do go down
this route, make sure you are not recommending high tech in exchange for
Steve Petrie is a consultant with John Joseph Financial
SRCE: Money Marketing
HDLN: Half of Lloyds TSB's endowments in red
BYLN: Chris Duncan
Lloyds TSB Life has stunned customers and IFAs by admitting that half its
mortgage endowment policies are highly unlikely to pay off homeloans when
In the worst case yet of homeowners being forced to foot the bill for
underperforming endowments, the bank also acknowledged that most of the
remaining policies only have a slight chance of hitting their target.
The admission comes as endowment providers are in the process of sending
their customers reprojection letters telling them how their policies are
Lloyds has sent half its 270,000 policyholders red letters warning them
that their endowments are in serious danger of failing to pay off their
mortgage and 46 per cent have been sent amber letters which mean policies
will have to increase by 6-8 per cent to avoid a shortfall.
Just 4 per cent of policyholders have been sent green letters, putting
them in the clear. ABI figures show the industry average for red letters is
around 14 per cent, with amber 36 per cent and green 50 per cent.
Scottish Amicable says almost half its policyholders have had green
letters while Standard Life, Norwich Union and AMP have pledged to make up
any shortfalls as long as certain growth conditions are met.
Independent Financial Services director Jim Gillespie says: “These figures
are just shocking. Lloyds has to bear responsibility for this and it just
emphasises again the need for independent advice.”
Riach Independent Financial Advisers proprietor Bob Riach says: “It is
quite frightening and will do even more damage to the endowment industry.
It would be very interesting to see what growth rate assumptions were used
when these policies were sold.”
A Lloyds spokeswoman says: “The policies are not really mature enough to
have benefited from the healthy economic climate. We will look into any
allegations of misselling on an individual basis.”