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Quote of many colours

One of the key industry issues is consumers getting advice when arranging protection. Money Marketing’s No Advice No Protection campaign has made it clear that advice is an essential part of the process.

The scandal over the amounts charged by banks for payment protection insurance is further evidence of the need for consumers to get whole-of-market advice.

In many cases, protection cover is provided at the same time as the consumer is buying another product such as a mortgage which significantly limits the time available for an adviser to talk about suitable plans.

The customer is invariably more interested in talking about their new mortgage, how much they can borrow and the monthly repayments than they are about the cost of insurance. The adviser must give detailed protection advice to a consumer in a very limited time.

Direct Life and Pensions’ new service, LifeQuote, could be a valuable tool for advisers. The package comprises an abbreviated protection fact-find linked to a comparative quotation service which can generate a draft suitability letter.

The service is easy to use. Advisers complete a fact-find of basic client details such as name, date of birth, gender, employment status, annual income, etc. In some areas, additional screens pop up to get more detailed information. For dependents, the names and how long they will be dependent for are entered. The monthly expenses screens vary based on housing arrangements. Adviser can click on an icon and enter a default amount for budget figures based on the information already entered.

The system maps over 2,700 occupations so insurers’ different inter-pretations are fully catered for. Money Marketing has reported that the Origo occupation definitions need a serious overhaul and it is good to see that LifeQuote has worked around these deficiencies.

After the fact-find inform-ation is entered, the system asks the client to prioritise their different protection needs between clearing a mortgage or providing lump sums or ongoing income in the event of long-term illness, etc. Various points can be desel-ected and declined if the client does not want to provide for a specific circumstance.

A budget for protection is agreed with the client and entered into the system. At no point is the adviser asked to enter a sum assured for any part of the cover as the systems identifies a suitable level of cover based on the information provided.

The comparative quotation engine generates a summary that shows all the cover that can be provided in priority order within the agreed budget. Other cover that can be provided but exceeds the budget is shown separately. Details of the life company providing the cover are shown and alternative companies are illustrated.

The system can also generate a draft suitability text which the user can copy and paste into their word processing software. Before using the suitability wording, the adviser must agree not to hold LifeQuote respon-sible for claims that may arise out of the advice.

I can understand entirely why it would do this although I do wonder how fair this is, given that the system locks down the basis of the recommendation.

The system does not automatically link to providers’ extranets for submission of applications but advisers can use the express underwriting service provided by LifeQuote which involves a simple two-page application and a call centre underwriting process.

In this case, LifeQuote carries the non-disclosure risk and takes responsibility for organising trust forms.

Mortgage advisers are clearly the main target for the service as they advise on big amounts of protection cases but may not have the time to specialise in this field.

The system includes a 71-page overview and technical summary of the protection market which is detailed but easy to read.

There are four life offices live on the service – Bright Grey, Liverpool Victoria, Scottish Equitable Protect and Scottish Provident.

LifeQuote managing director Mike Ward says this represents the full universe of providers which can offer all the products on the system under a single plan. If a client excludes certain cover and there are additional insurers which offer a suitable product, the software increases the life offices included.

If the adviser is submitting business via LifeQuote, there is some commission sharing but the adviser may think that by passing respon-sibility for processing to Life-Quote could give them more time to write more business and LifeQuote commission rates are about 140 per cent of Lautro.

There are some obvious things that could be done to prepopulate data to the intelligent protection system from mortgage sourcing tools and adviser client management systems that would make the system even faster but I was creating quotations and suitability letters within a few minutes of using the package.

As the system is based on multiple product plans, the adviser could place the cover cheaper by disaggregating the individual covers but Ward says that starting with a budget from a client and identifying how much cover can be achieved within that budget may well result in the client getting extra cover they might not have considered.

Ward is also keen to stress that the system will always use lower-cost products such as family income benefit rather than lump-sum cover when protection is needed for only a limited period.

Advisers get a free 28-day trial by visiting After this period, the service is free to advisers who submit one proposal a month via LifeQuote. Advisers who want to continue to deal direct with providers pay a licence fee of £19.95 a month including VAT.

This package raises the bar in terms of what an adviser can easily achieve using comparative quotation software. It will be fascin-ating to see how the bigger quotation portals react.

Ian McKenna


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