[speaker001:] God, but, no, for ease of er, management, what we'll do is we'll stick to the teams on the tables where you are now. Erm, working in, what, one team of four and two teams of three. Can I ask you though to devise a name that you as a team would wish to be known by, and then I can start er, on the scoreboard. So? March , [LAUGHTER]
[Carol:] Right, have you got a name?
[speaker001:] The Losers
[Carol:] The Losers
[speaker001:] [LAUGHTER]
[Carol:] I should ban that as er, totally unacceptable.
[speaker001:] Middlemarch, because No, I mean [clears throat], The Experts, [LAUGHTER]
[Carol:] With you, were you all watching? the Experts, yes.
[speaker001:] They are mystic, I don't
[Carol:] Did you miss it last night then?
[speaker001:] Last night.
[Carol:] So is it Middlemarch or Experts?
[speaker001:] [clears throat] Sorry? Middlemarch, it's Middlemarch. It's to say anything else. Young males, march.
[Carol:] And the third team?
[speaker001:] Wall Street.
[Carol:] Wall Street, alright. Good.... Now all good teams, all good quizzes have erm, rules.
[speaker001:] And phrases. [LAUGHTER]
[Carol:] Come on this is Abbey Life, come on. Erm, all quizzes have rules, there's basically just one rule, that anything I say or do is right, but, and that's the rules. Yes, it seems reasonable? Deathly silence.
[speaker001:] You're the ombudsman.
[Carol:] That explains it a bit more then.
[speaker001:] What's the difference between you.
[Carol:] I'll ask you a question, if you get it right, without any help from your team or anybody else, you're going to get three points for your team. If you need a little bit of nudging by the people working with you, er, then there's a possible two points for the team. If you then pick up a bonus, because the team couldn't answer it maybe, er, you will get a bonus for your team. However, I am not fair, because the world isn't fair. So if for any reason I feel like adding on some points I will do, and equally I'll decide to take some points off if I feel like it. So, as I say, we go back to rule one, everything I do is right. Yes? O K any questions?... Excellent. Looking at me totally confused, that's the best way to start. Right, David, we'll start with you then. We're talking Covermaster here, what's the purpose of the Covermaster Plan?
[David:] Description of it, or purpose of it?
[Carol:] The purpose.
[David:] The purpose. Er, er, protection.
[Carol:] Protection, there you are. Nothing difficult. Right John, can you define the Covermaster Plan for me?
[John:] Flexible, whole of life,... assure [LAUGHTER]
[Carol:] Almost, [LAUGHTER] Anything, to add to that? Flexible, whole of life, assurance, anything else?
[John:] Er, la, la, la, la
[Carol:] A little bit of help from your friend.
[speaker001:] Unit linked.
[Carol:] Unit linked.
[John:] Oh, yes, yes, yes, right.
[Carol:] Yes, O K, so just the two, for Middlemarch. Er, Gerald, here am I, Mrs. Joe Public, and you've got to explain to me unit linking.
[Gerald:] [clears throat] Hm, mm, er, basically, er, what actually happens, is with your premiums, each month it buys X amount of units,
[Carol:] Right,
[Gerald:] Er, those units are used to purchase X amount of life cover, depending on how much you w, er, assurance you want in your claim, how much is to go towards savings, how much to go towards, whatever you want in your plan. The price of the units are actually allocated, erm, to each of those, in individual areas.
[Carol:] Erm, sort of. Sort of, let's think, er, tell me more about the units themselves.
[Gerald:] Well the units themselves are actually erm, bought each month.
[Carol:] Right.
[Gerald:] And they're actually bought in erm, at the offer price.
[Carol:] Right.
[Gerald:] And what you have to, what actually happens, you have what is known as an offer price, and a bid price.
[Carol:] Right.
[Gerald:] The offer price is when you buy into the plan, and bid price is when you actually erm, sell.
[Carol:] O K, excellent, excellent. I think I'll erm, I'll give you three marks for it, but I'll give you the opportunity for three bonus marks now, because here am I, Mrs. Public, and I didn't understand a word of that. I want to know what unit linking will do for me. Will I actually be buying a unit linking life assurance plan, and not a with profits life assurance plan. So what's the benefits for me, in the unit linking?
[Gerald:] The benefits for you in unit linking is actually it's going to relate to like the cost of inflation,
[Carol:] Yes, good.
[Gerald:] Erm, [whistling] Erm, a, a, no, not really, they're qualifying times, erm,
[Carol:] O K, you pick up a bonus for that, anybody else on the team come up with something positive about unit linking that'll make me say, yes, I like this one?
[speaker001:] You er,ma, it balances out the er, benefits from like the whole of the term and it's not necessarily, like a with profits system, you get a lot of bonuses at the very end.
[Gerald:] Right, actually that's very true, that's a v, that's a very good point. Yes, certainly, I'll give you a point for that. Anybody else? David have you got anything to add?
[speaker001:] No not really, No, look he's gone to sleep then there, [LAUGHTER],
[Carol:] I agree he's gone to sleep. Anybody on this table anything to add?
[speaker001:] Eas,eas, easy travel, easier opportunity for people to, to spread their investment. It's an easier way into the stock... market,
[Carol:] So I can invest in the Stock Market without having to be knowledgeable about it?
[speaker001:] yes
[Carol:] And I can spread my investment. I like both of those, in fact I'll give you two marks for that. Because, two things there. I can spread the risk between all the various er, homes for the unit linking, funding in invests in, in various assets. What type of assets? this time, what type of assets do er, funds invest in?
[speaker001:] Property.
[Carol:] Property,
[speaker001:] Equity Stocks
[Carol:] Equity and stocks
[speaker001:] Fixed interest
[Carol:] Fixed interest arrangements, O K, bonus for that team, well done. So I can spread the risk by using a variety of investment areas. It's exactly what you said, and the other thing you said was?
[speaker001:] I can't remember now, spread the risk, and
[Carol:] I don't have to get do I?
[speaker001:] No
[Carol:] I don't have to make the decisions. Who's making the decisions?
[speaker001:] Fund manager
[Carol:] Fund manager, another bonus, excellent, yes. O K. So we must be getting round to Sue's question.
[Sue:] Oh
[Carol:] Right Sue, what does it mean, a whole of life policy?
[Sue:] Erm, it means that, you take out the policy for the whole of you life, no matter how long you live, so it keeps going until you die.
[Carol:] Yes, O K. Erm,
[speaker001:] No that's right. [LAUGHTER]
[Carol:] No, I'll leave it.
[speaker001:] [LAUGHTER]
[Carol:] You worked hard for that, you didn't get any points. Life's not fair, anyway, is it? Right, a whole of life, yes, it pays out when you die. It's not something, like the one term assurance, you know, when you have a policy for ten years, and if you live longer than the ten years, tough. You know. Just your hard luck. O K, erm, minimum and maximum ages at entry. Janet?
[Janet:] Erm, seventeen and seventy one. Oh, er, seventy. Minimum age at entry?
[Carol:] yes.
[Janet:] Seventeen.
[Carol:] Seventeen, the maximum age?
[Janet:] Seventy one,... next birthday.
[Carol:] Next birthday, next birthday.
[speaker001:] [LAUGHTER]
[Carol:] Only the two, you missed off the next birthday. I will give them a bonus for not making a fuss about losing their marks earlier.
[speaker001:] [LAUGHTER]
[Carol:] Right, June, er... four ways that you can write the policy?
[June:] Erm, on joint life.
[Carol:] Joint life.
[June:] Erm, own life
[Carol:] yes
[June:] Joint life, last survivor
[Carol:] yes
[June:] And life of the
[Carol:] Excellent, a little bit of the first one you just said, joint life, if you want to be
[speaker001:] First claim First claim.
[Carol:] First claim, O K, only the two marks, because he jumped in too quickly there, so you get docked one of your marks you see.
[speaker001:] [LAUGHTER]
[Carol:] Right, er, Philip, Philip. Erm, what's the minimum monthly and annual level premium?
[Philip:] Er, minimum monthly premium is twenty pounds
[Carol:] Mhm
[Philip:] And the minimum annual premium is two hundred.
[Carol:] Good. Ilias, if the minimum monthly premium is twenty pound a month, level and the minimum annual premium is two hundred pound a month, does that mean if I pay annually I get a discount, it costs me less?
[Ilias:] Yes
[Carol:] Yes,... Andrew, what do you reckon? If yes, at Leyton Buzzard they give discount to pay annually, what do they do in, can't remember, Hanley?
[speaker001:] Well no, because they reckon they'd be, invested two hundred pounds right at the very beginning, you'd most probably make the, the f, fall short over the rest of the year, in the investment.
[Carol:] You're still sort of saying I get a discount really, you're still saying it's only going to cost me two hundred a year. Yes?
[speaker001:] Yes. Yes. Yes, I suppose so, yes.
[Carol:] What about in,... Haverford West?
[speaker001:] Well I would have thought you'd get a discount if you're buying units in the fund then you benefit due to paying annually, if, if you paid in a lump sum erm, you're going to have more units, you know, at the start.
[Carol:] Which is almost like saying I get a discount.
[speaker001:] No, you're still paying the same, it's just
[Carol:] Ah, let me put it more clearly, because I don't think I've put the question clearly enough. Let's say, that me as an individual, if I was erm, buying a Covermaster Plan, for twenty pound a month, the minimum premium, let's say I could get fifty thousand pounds worth of cover.... If I wanted to pay annually would I still get fifty thousand pounds worth of cover, or would I have to pay two hundred and forty pounds per year? That's changing the question slightly, so, let's go back to Ilias, what do you reckon?
[Ilias:] Two hundred.
[Carol:] Pardon?
[Ilias:] Two hundred and you get
[Carol:] Two hundred, so you still, you still reckon, you reckon it's a discount?
[Ilias:] yes
[Carol:] O K, er, let's go back to Andrew, how much would I pay for my fifty thousand pounds of cover if I wanted to pay annually, will it cost me two hundred or two forty?
[speaker001:] Two hundred, I still think, yes.
[Carol:] Two hundred, and who's the other person I asked?
[speaker001:] Two hundred.
[Carol:] Two hundred, anybody disagree?...
[speaker001:] Go on then.
[Carol:] Sue do you disagree?
[Sue:] I disagree.
[Carol:] You can have a point for disagreeing because you're right. Yes, erm, you get what you pay for. Right, so, if it was going to cost me twenty pound a month for fifty thousand pounds worth of life cover, and I wanted to pay it annually, I'd have to pay it twelve times, I'd have to pay two hundred and forty pounds. Minimum premiums are just the smallest amount that Abbey as a company can make a profit on. So, we could have somebody start at twenty pound a month and we know we can make a profit and we can provide a good service to the clients, a good level of cover. When it comes to annually, we will accept two hundred pounds per year as a minimum premium, but in this case, they'd probably get about forty five thousand pounds worth of cover. They'd get less cover. You get what you pay for in this world. O K, any, any questions?
[speaker001:] Is the difference then because they're saving it in
[Carol:] It's, it's yes, in, in that respect. We can make a profit from two hundred pounds a year. Er, you might just say well why don't we pass that on to the clients, but we don't.
[speaker001:] Right.
[Carol:] They, they've got to pay twelve times. I think it just gets too complicated when you look at the various contracts. If you have different levels of payment, it just gets very, very complicated. Any fu, everybody happy with that? Excellent. Who had the last question?
[speaker001:] Ilias Ilias
[Carol:] Who had the last question?
[speaker001:] Ilias
[Carol:] Excellent. A bonus for being honest on this team, and being awake. So it must be Andrew, your question, alright. Erm, what's the minimum monthly and annual escalating premium?... Erm, Philip or somebody gave me the level premium.
[speaker001:] Well the minimum monthly is still twenty pounds.
[Carol:] Right, so what's the minimum annually, the minimum we can make a profit on?
[speaker001:] I say that's still, still at, still at two hundred pounds again.
[Carol:] Absolutely, tried, I tried to put you off, but I didn't manage it did I. O K, good. So, we must be, are we back with you David, or with you Sue? Back with David, ah, right. How does the escalating premium work?
[David:] Er, increases by ten percent simple interest per year, for the first five years, and then stays level.
[Carol:] Excellent, well done. Well done. Right. Let's, yes, Shirley? Can I have the last question? How does the escalating premium work then Shirley? Just as John said.
[speaker001:] [LAUGHTER]
[David:] John, you got my name wrong.
[Carol:] Next question, John, er, right.... Erm, what's the current, it's a bit d, difficult terminology here, what's the current cost taken out of the fund each month for expenses? The expense charge is usually it's called, but just occasionally it comes out as policy fee. Erm, how much is it?
[John:] What the actual fee itself?
[Carol:] Yes, in pounds and pence.
[John:] Oh, one pound nineteen?
[Carol:] One pound nineteen, what do you reckon Kim?
[David:] I thought it was a percentage?
[Carol:] Ah, no, this is the bit that comes out annually,
[David:] Right
[Carol:] I know what you're thinking about? What do you reckon table at the top?
[speaker001:] Yes, we'll go along with one nineteen.
[Carol:] You'll go along with one nineteen. What about the others? Yes, you'll go along with it. Yes, absolutely right, yes, well done. One, two, three.
[speaker001:] Was that me or
[Carol:] No
[speaker001:] [LAUGHTER]
[Carol:] Right, erm, ah, I think the best thing we can do is to look at the rate book for this question because you may have remembered it from er, you may not. Kim, could I ask you to pass those, the Covermaster rate books that under please.
[speaker001:] You obviously keep taking the rate
[Carol:] No, but, but this, this problem, this was on, this was on actually.
[speaker001:] Have we got one yet?
[Carol:] Yes, you haven't had them yet. Er, and we'll be looking at them later. That's great, thank's Kim. Is the on the C V T, but again it's, it's easier to look at something when we're talking about this, so I'm going to ask you to look at the Covermaster rate book, which doesn't have page numbers, but I want you to find the allocation to units table which is about four or five pages in. One, two, no, I'm wrong, three pages in. Allocation to units table.... That's right. Yes, that's right.... Right, everybody there.
[speaker001:] Oh, yes, yes.
[Carol:] Allocation to units, third page in. Now, this concept is the same whatever product we're talking about, and we'll be talking about four products this weeks, and several more next week. And I've got to tell you it's erm, an area which they ask questions about very frequently. So if we can be quite clear in our minds from now, you might get questions on it tomorrow, you might get questions on it at some point in the future during the week, but they inevitably come at some point. And we're talking about allocation to units. We're talking about how much of the client's premium, let's say he was paying thirty pounds a month, actually ends buying units in his fund. Now if you look at that table, you can see that it's set out, on the left-hand side, the age at entry, and the top, whether he pays his premiums escalating, or level. So the very simple question is, if I wanted a higher allocation to units, who am I asking the question to, Sue is it yours. Yes, it must be yours, Sue or something. Yes, it's yours now. If I wanted to get the highest allocation to units would I pay level or escalating premiums by looking at that table?
[Sue:] Level
[Carol:] Level. Absolutely right. The question they will ask you, very frequently is, during the first years of the plan, there is a reduced allocation to units. They buy less units with the client's premiums. One the reasons we can see, one the things that affects the allocation you can see, is whether they pay level or escalating. You can see on the Covermaster, on an escalating plan, it's twenty percent each year for the first four years. So only twenty percent, only one fifth of this client's premium is going to buy units in those first four years. So only six pounds a month is actually going to get invested in his fund in the first four years. After that the total amounts, or even a bit more if we look at it, erm, what over factor, Janet, no John, it must be John's turn now, affects the allocation to units in those first four years by looking at that table. One is where they pay in escalating or level, the other, what else affects the allocation?... Have you got it from the tables.
[speaker001:] Is age.
[Carol:] It's age, yes,
[John:] I would have said that, I would have said that, I thought it was too easy.
[Carol:] I know, I know.
[speaker001:] [LAUGHTER]
[Carol:] Well I like to make things easy for you John.
[John:] Thank you.
[Carol:] Er, two marks. Because you can see if the client's up to the age of forty, he gets a higher erm, a reduced allocation, but if he's seventy, he gets actually forty percent allocated in the first year, and he gets er, a full allocation from then on. So those two factors affect how much of the client's premium buys units in the first four years. Whether they pay level or escalating premiums and his age. Income might insurance his age, and other things it might be the term of the policy, we're looking at how long he pays it, because if you think, Covermaster, his age affects the term. If somebody takes a Covermaster plan out at twenty five, we expect them to be paying it for a long time, if he takes it out at fifty five, we expect him to pay less. Philip?
[Philip:] Th, the ag, the maximum age of entry is seventy one, next birthday isn't it?
[Carol:] That's right.
[Philip:] Why on the, hm, why on the chart do they show it seventy one to a hundred and five?
[Carol:] Because people can still be paying their premiums once they go past seventy one, they haven't got to cash it in.
[Philip:] So you're say, ah, right, no it's just a, er, it says next birthday, at entry it says
[Carol:] It says in the first b, yes well, mm, it doesn't make sense, because they can't have it after seventy one can they? er, initially. O K, so those are the two factors that affect the allocation to units in the first four years. The next question's got to be to Kim, if only six pounds of his premium is buying units in, if he has an escalating plan in his first four years, what's the other twenty four pounds going towards?
[David:] Administration
[Carol:] Administration, yes, which is a nice way of putting it. Another way of putting it?
[David:] Erm, the associate's commission.
[Carol:] Absolutely. One, two, three and a bonus. It's the type of client, life assurance clients are the type of client where the commission's all come out in the first four years. Which is why the clients are sold a plan inappropriately and they cash it in, they get very little back. Your commissions are paid by the client over those first four years. Erm, that accounts for the reduced allocation and the setting up fees as well. But it's main, it's mainly your commission. Now if you've got somebody who you are protecting their family, and they'll be paying that plan twenty five years or more, the fact that they pay commissions out for the first four years is immaterial, what they want is peace of mind and protection. Erm, it could have been spread out over the whole twenty five years as it is with other products, but in life assurance at the moment, it's out of those first four years. But you can see why if you're selling inappropriately, if you sell someone for example, a savings plan, and they cash it in the first four years, and they don't even get what they paid in it, how they're going to be very annoyed, because from what they could see, they were getting a savings plan. If it runs for the ten years, they're going to out-perform the banks and building societies, and they're going to be very happy. So appropriately sold, there is no problem, but if it's not appropriately sold, you can see that people really do, don't get back what they put in. So that's the allocation to units. Erm, and I've just asked John, so I must be now with, no I've just asked Kim, so I must be now with Philip. Yes? Philip, looking at that page, erm, after the first four years, two other factors affect the allocation to units, and that information is in the bottom of that second page. Can you give me one of them. And obviously Janet, you'll be giving me the other one, so if you can take the time to look at it.
[speaker001:] [LAUGHTER]
[Philip:] Erm, well it's the er, year ruler.
[Carol:] Absolutely,
[speaker001:] [LAUGHTER]
[Philip:] Yes, it's the sex.
[Carol:] [LAUGHTER] It's the sex [] Do you sex
[Philip:] It's the sex that does it
[Carol:] It's the sex that does it. What's this, or something.
[speaker001:] [LAUGHTER]
[Philip:] Or even if?
[Carol:] Or even if. It great that you've got me totally confused here.
[Philip:] Erm.
[Carol:] It actually is part of the answer that if, [LAUGHTER] you quite amaze me []
[Philip:] Yes, a combination of er, of age and sex really. Er,... a male, a male up to erm, well, a male or female up to erm.
[Carol:] If you jump, yes you're looking at the right place, but you've jumped ahead. What is determined by the client's age and gender?
[Philip:] Right, oh, the er, the amount of erm, additional units or looking
[Carol:] Not quite, not quite, he's jumped ahead a little bit, can you help him out on the table?
[speaker001:] Waiver of premium.
[Carol:] It's waiver of premium. Absolutely, so it's the cost of waiver of premium. Waiver of premium you know, as a benefit, you know about waiver of premium. I'll pick it up later. But it's the one thing that actually comes out of the premium before the units are bought, because it's a percentage. And it's a percentage of the premium so it's a fixed amount. And if you look at the bottom of that table, somebody up to the age of thirty nine, will pay two percent of their premium erm, for the waiver of premium benefit. Anybody from forty to forty nine, will pay three percent and then they've got this strange idea that ladies over the age of fifty are going to have more time off work through illness, so they're going to charge us four percent, and the men three percent. Er, that's the cost to waiver of premiums. So Janet, your question, which is not as I in, intimated it might be at all, so you, you can be well annoyed, erm, if you're setting up a, a joint life policy with waiver premium on both people, and the wife is fifty one, and the husband is forty, how much will be deducted from their units according to waiver of premiums?
[Janet:] Take the wife's age, the wife is forty three?
[Carol:] The, the wife is fifty one, and the husband is forty.
[Janet:] Oh, I get, yes I see, yes. Erm,... seven percent.
[Carol:] Seven percent, you have to add them together. You have to add the cost of waiver on a joint life policy, you have to add, add the costs together. Absolutely. Good. She even got round giving me the wrong answer first, which I thought was quite subtle.
[speaker001:] [LAUGHTER]
[Carol:] Well done. Erm, so the next question must come to, to John, or is it Kim, it must be Andrew. It must be Andrew, right. Looking at that page, once the plan has been set up, after those first four years, whether the client has waiver of premium or not, actually affects the allocations to units. We've established that's a nice table there to tell you. There's one other factor, at the bottom of that, er page, will tell you something about the allocation to units.
[speaker001:] If they don't have the waiver of premiums they get more units, because the more money goes into the er, whatsit.
[Carol:] Absolutely true. But it wasn't what I was asking, so I'm going to give you the points, but it's absolutely true. So we must move on to Philip, no?
[Philip:] Not again.
[Carol:] Not again, it must be John then, John?
[John:] Oh, sorry. [clears throat]
[Carol:] No, no, it's good. David
[speaker001:] David, it's David. You ought to get a bonus scheme up just for that.
[Carol:] No, no, no, no, no, no. That's too generous. Erm, what other factor, other than whether they have waiver of premium or not affects the allocation to units. Well wriggled there Andrew, that was er, a good wriggling effort.
[speaker001:] [LAUGHTER]
[Carol:] Read another page.
[David:] Total premium.
[Carol:] Ah right, what about the total premium?
[David:] Well whether it's up to, seven hundred and seventy nine pounds ninety nine P per annum,
[Carol:] yes
[David:] Erm, if it's up to that, it's a hundred and three percent.
[Carol:] Right.
[David:] And if it's seven hundred and eighty per annum, or seventy pounds per month, er, and, and over, it's a hundred and four.
[Carol:] Absolutely, how much they pay? Throughout our policies, anybody paying up to seventy eight pounds a month gets one allocation, anybody who can afford, and will pay more than seventy eight pounds a month will get a higher allocation. An extra one percent. Right, this will keep coming up throughout the er, products. Can we just be clear in our minds before we move on, how it affects. We're talking about the allocation of the premium to buy units. Two factors affect it in the first four years. That's whether you pay level or escalating and the age of the client. After that, throughout the rest of the term, they have a reduced allocation if they have waiver of premium, and they have an increased allocation if they pay more than seventy eight pounds a month, or seven hundred and eighty pounds a year. So the premium level and whether or not they have wa, waiver of the premium affects it. Er, next question, John? You have a client who has waiver of premium [sound goes quiet] And he's still paying his premium for his Covermaster, will we actually give him more units?
[John:] No
[Carol:] No we don't. We don't actually make up, he still carries on paying the same, we don't, we don't increase the allocation, when he gets to sixty, or sixty five or whenever. So, where are we John. One, two, three, well done. Any questions on allocations before we move on?
[speaker001:] Yes, how do you decide on a hundred and three or a hundred or four for allocation?
[Carol:] Just to be awkward. I mean, literally, you'll get, er, you invest the thirty thousand units, er, and you'll get a hundred and three pounds extra percent of the money of the money invested. So if three percent is, what, I don't know, what is it, ninety P or something? You get an extra ninety P, buying units for you. Alright. Erm, we've just asked John so we must be now with Kim, are we? No we're not, we're with Gerald
[speaker001:] Gerald
[Carol:] Gerald, yes, absolutely. Erm, we have a client, we do have clients, we have lots of client. We have a client, who shall we have as the client? Erm, right, we'll have Shirley as the client, and we're a life company and we're looking at the cost of providing Shirley with life cover. So we're looking at the amount we take out of her plan each month to cover for life cover. We call it the life cover charge, or technically, er, a phrase I'm sure you're used it, the mortality reduction. What factors will we take into account when we're assessing the cost of life cover for Shirley?
[Gerald:] We take into account her age.
[Carol:] Age, yes.
[Gerald:] Erm, the level of life cover required.
[Carol:] Absolutely. The level of cover required, good.
[Gerald:] Erm, medical factors.
[Carol:] Health, yes.
[Gerald:] Erm, occupation.
[Carol:] Occupation, yes.
[Gerald:] Erm, there's one more I think.
[Carol:] So we look at the age, look at the level of cover, health, you look healthy Shirley, are you in good health? Right,occ, you don't do any dangerous occupations, not a steel scaffolder or anything? You know? No
[Gerald:] I think sex on premiums.
[Carol:] Er, the premiums, we do take into account sex or gender, yes. Erm, it actually affects the, the rate.
[Gerald:] Yes
[Carol:] But it is taken into account if we're talking about the cost of life cover.... One more. Anybody on the table?
[speaker001:] Hobbies and pastimes.
[Carol:] Hobbies and pastimes. Have you got any dangerous pastimes, Shirley? I go hand-gliding. You go hand-gliding. [LAUGHTER] Right []
[speaker001:] [LAUGHTER]
[Carol:] One, two. Just the two, because er, Andrew helped you out. Good. Actually, er, as a point, if you find a client who goes hand-gliding, who goes stock car racing, don't always assume that they're going to be rated, you just submit it to the underwriters, and they make their own decision. I've got a client who races stock cars, but as he only does it three or four times a year, they don't actually charge him any extra at all. So, it's not essential, but we will look at it. Good, well done. Right, erm, Philip, Susan
[Sue:] It's me I think.
[Carol:] Sue, Sue, yes? Erm, when can a client claim under the terminal illness ben, benefit? What illnesses do you mean? No not what illnesses, terminal illness.
[Sue:] Oh, Terminal illness, oh, sorry.
[Carol:] When can he, when can he claim?
[Sue:] Erm, if he's been going to er, erm, in the unlikely, er, twelve months, that it's unlikely that he's going to have more than twelve months to live.
[Carol:] yes, if he's been diagnosed as er, as a terminal illness. I E, he's likely to die within the next twelve months. Then the sum assured is payable, just as if he had actually had died. O K, good.
[speaker001:] Sorry, just a quick question there. The, there's two [clears throat], there's two parts of it,tw, a diagnosis and twelve months?
[Carol:] Well,th, the definition of a terminal illness as regards that is, according to the underwriters, is that the client's life is likely to die in the next twelve months.
[speaker001:] Right, O K, I understood it was the time factor that was, right.
[Carol:] Yes, that's when, that's when they put no limit on it. Right, erm, Reviews. Erm, reviews, reviews, we're up, Sue, so it must be,
[speaker001:] John. John
[Carol:] John again, right. When are the reviews held on a Covermaster Plan?
[John:] Ten, five and one.
[Carol:] Ten, five and one, mm, interesting. Explain.
[John:] Oh, right. [LAUGHTER] Erm, on the tenth anniversary of the
[Carol:] Yes, good.
[John:] The policy.
[Carol:] yes
[John:] [sigh] Every five years after the age of... fifty or fifty five, I can't remember quite which, and then one year after the age of, after sixty five.
[Carol:] Right, and one other time.
[John:] Er, pass.
[speaker001:] The end of the erm,
[John:] yes, right
[speaker001:] The selected time, the time, the selected period
[Carol:] The selected period, good. The first review's after ten years, then every five years up to the age of sixty five, then annually. But if you get to the end of the selected period, there's always one.
[speaker001:] But, I, I misunderstood, I obviously got it wrong then. I thought it was at the tenth anniversary, every five years after that, I didn't realise that came into, John said it was.
[Carol:] yes, yes.
[speaker001:] Up to the age of sixty five.
[Carol:] Up to the age of sixty five, and then
[speaker001:] Oh I'm sorry I misunderstood John, then I've
[Carol:] And then, and then annually after that.
[speaker001:] yes, I thought he said, after the age of fifty five,
[John:] I did
[speaker001:] He did, yes Yes, yes. Some people have [LAUGHTER] Then the extra five for up
[John:] There you have, let's have it back for honesty.
[speaker001:] [LAUGHTER]
[Carol:] No, no, you were only honest because they made you be honest.
[speaker001:] [LAUGHTER]
[Carol:] Right, I er, I heard you say the right answer, so I was obviously incorrect. But is everybody quite clear then? The first one at ten, every five years up to the age of sixty five, then annually, and there's one at the end of the selected period. O K. Good, Kim, erm, how does the client, oh, what is the selected period?
[David:] It's defined at the onset of the policy.
[Carol:] Mhm
[David:] The ten period being the qualifying period.
[Carol:] So for a minimum of ten years. yes.
[David:] Or whatever, erm, the client chooses, to cover the specific period of their life, that they need life cover for.
[Carol:] Absolutely right, good. So, in effect, it could look like that, yes?.... Where we have a client who has a need for the first ten years for it looks like a hundred and ninety thousand pounds worth of life cover, at the end of the ten year period, the need is reduced, maybe the children have left home, so sum assu, assured reduces down to, in this case, it looks like to be about fifty thousand for the rest of the time. Good, well done.
[speaker001:] Can I ask another quick question? In practice, does that happen very often? That people will, will deliberately put it down half way through the term?
[Carol:] Well let's, let's before we answer that, let me ask erm, Philip a question. We get to the end of the selected period,
[Philip:] Yes
[Carol:] What options does the client have?
[Philip:] [clears throat] Well he can er, he can come down to the original reduced figure.
[Carol:] Absolutely, yes
[Philip:] Er, or with erm, with further, further underwriting, he can er, subject to further underwriting, he can er, choose er, an additional
[speaker001:] [LAUGHTER] He's chewing his, he's chewing []
[Carol:] He's woffling, he's woffling, he's woffling.
[speaker001:] [LAUGHTER]
[Carol:] So well, how do we do it? He can either erm, continue at the same level, but he pays more premiums. Yes, he can continue at that level of a hundred and ninety but he's obviously going to have to pay more, because he's only paid for it for ten years, or he can reduce it down to the original amount.
[Philip:] Is that, that's not what I said is it?
[Carol:] No it's not what you said.
[speaker001:] [LAUGHTER]
[Carol:] I'm not going to repeat what you said. But to allow you to get a bonus point, if he continues at the same level, will we require further annualising from him. For a hundred and ninety thousand?
[speaker001:] No
[Philip:] No
[Carol:] Who answered?
[speaker001:] These two. I didn't, I didn't.
[Carol:] I thought the three of you did very well thank you, because you're absolutely right.
[speaker001:] [LAUGHTER]
[Carol:] You don't need any further underwriting to carry on at that level, but you can do.
[speaker001:] Two bonus points for ventriloquism and [LAUGHTER]
[Carol:] No, why not, why not. Come on yes, one for ventriloquism. O K. Er, where am I, Janet, have you got missed out somewhere along the line, but never mind.
[speaker001:] And you, oh, I see, I'm sorry,
[Carol:] No, I'd noticed, it's Janet's turn now, but I think I missed you out, oh well, anyway, forget it. Erm, what happens if a client has, has established er, a Covermaster Plan for a selected period, and then for whatever reason, has a need to increase that cover. Maybe has another child, maybe a better lifestyle that they need to protect. What can they actually do?
[Janet:] They do, they probably ask for erm,
[Carol:] Well what,wh, can they actually increase this on their, their plan, increase their plan further?... Table can you help?
[speaker001:] yes yes
[Carol:] They can increase their plan further, what effect would that actually have to the plan though? To the selected period?
[Janet:] Reduce the plan.
[speaker001:] To the selected period.
[Carol:] Mm
[John:] Ah, oh Christ now,
[Carol:] He's going, woffle time, woffle time, are we ready?
[John:] I'm sorry, I'm thinking about it, right. Erm, the selected period gets adjusted then.
[Carol:] It does yes.
[John:] No but I mean it becomes, it becomes shorter.
[Carol:] It becomes shorter, yes, you're absolutely right.... And this scenario, we've got a client who started with er, it looks like a hundred and fifty thousand pounds worth of life cover, after five years he had a further need, perhaps erm, a further child or, as I say, er, a lifestyle increase or whatever. So he wanted more life cover, but he obviously on his old plan couldn't sustain that to the same period of time, so he had it for a shorter period of time, the ten years, and when it dropped, he dropped down again. So what you actually do, is have a higher level of cover but for a shorter selected period, to fit in with your circumstances. O K. Good, I think we'll give you the marks for that one then John. Er, we must now be with Andrew. Question, you go to see Mr. and Mrs. Client tonight, and they need, let's say they need a hundred thousand pounds worth of life cover, and to fit their lifestyle, or their children, their family, they need it for eighteen years, they can't afford that. Would you give them a hundred thousand pounds worth of life cover for a shorter period, looking at them making up the difference perhaps later when they could afford it, or would you give them initially a reduced amount of life cover, say eighty thousand, for the eighteen years? What do you think would constitute best advice? ..., I think perhaps give them the, the shorter years. You're absolutely right, er, you're absolutely right, so where are you? One, two, three, yes. If this is what they need now, this is what you give them, er, on the understanding that perhaps they only have it for fifteen or ten years, but in fifteen or ten years' time, they might well be able to afford to extend it and pay more. So it makes sense doesn't it? You're doing er, the best for your clients. Good. Well done. Erm, right, oh, er, John, it must be, must be John, because er, must be David, yes.
[speaker001:] I think you left it too late Might even be John.
[Carol:] David erm,
[speaker001:] He's this Welsh twit on the right [LAUGHTER]
[Carol:] Did he, did he
[speaker001:] No, no, he did get the right to I, I'd ask the
[Carol:] It must be definitely a point off for racism here. Absolutely.
[speaker001:] I was just trying to help you really. [LAUGHTER] you see, I was trying to help you.
[Carol:] You were trying to help me put the names in place, without finishing it off. Yes, bit of nice creeping there, but it didn't work, John. O K, so David, at what stage can you claim under a terminal illness benefit, for a joint life, last survivor plan?
[David:] At what stage can you claim for a terminal
[Carol:] Illness benefit on a joint life, last survivor plan?
[David:] ... You can't get it.
[Carol:] You're absolutely right. Sue was desperate to tell you, but, absolutely desperate. Not available on a joint life, last survivor plan. You're absolutely right. Good. Erm, at what age must the selected period finish, Philip? It starts a minimum of ten years, but what age must it always finish by?
[Philip:] Thirty five.
[Carol:] Er, that's how long it can be, but it, as regards the client's age? It can be, it can run from ten to thirty five years, but it can't run past a client being a certain age? Team?
[speaker001:] Sixty five Sixty Fifty five It's one of those three anyway.
[Carol:] Any, any, er, anybody else? Everybody put up your hands. Fifty five? Sixty five?
[speaker001:] Seventy five.
[Carol:] Seventy five.
[speaker001:] Sixty
[Carol:] Sixty
[speaker001:] Seventy one
[Carol:] Seventy one Anybody anything else?
[speaker001:] Fifty eight and a half.
[Carol:] O K, that's I'm sorry, that won't go, go for that one. Well done, seventy five. Bonus for Gerald. Taken at the end. Er, but I will give you a mark for saying it's ten to thirty five years because you're absolutely right, it can be established for thirty five years. Right, O K, erm, Gerald, policy reviews. Policy reviews. Why are they carried out?
[Gerald:] Erm, to make sure that the sum assured that the clients have got, or the funds can actually meet it, erm,
[Carol:] Absolutely, absolutely, you're looking at... the sum assured that the client has got, being supported by the fund. I E, you can take the charges out regularly and sustain the life cover. So who actually holds the reviews? The company or the client?
[Gerald:] Er, the company has to review
[Carol:] The company. It's a company thing. You will actually hold a policy review with your client, I E, you're going to see them each year at least, but the policy reviews as regards the company are held to make sure there's enough growth in the client's funds to sustain all the charges. Excellent. So, er, Sue, what amount of growth are we looking at, traditionally or historically with Abbey to er, be able to do that?
[Sue:] Er, eight point two five.
[Carol:] Eight point two five. These questions are obviously getting far too easy, you're er, answering them so well. How many funds, Shirley, may the clients invest in initially, if they choose?... Well we all
[speaker001:] [LAUGHTER]
[Carol:] Well we all put five initially, but we were told you could put it up to ten. Initially. Five Five, you're right. Initially, five. Once the policy's established, up to ten. O K. Kim, what fund would you recommend your clients put their money, in er, with a, with a Covermaster Plan?
[David:] A managed fund.
[Carol:] A managed fund, absolutely. Right, erm, what happens then, Philip, if the client says to you, and it's unlikely with Covermaster, but it's the same principle if you're talking of a savings plan or a pension, erm, I don't like the idea of my money being invested in a managed fund, I've been reading the financial press, and I'm very interested and excited at the thought of the Japanese market going up through the roof. So I would like to invest my Covermaster money in the Japanese funds. Can you do that? What would you do? What's the circumstances? How would you cover your back etcetera, etcetera,
[Philip:] Tell him, you can only, you can only advise you to actually invest in the managed fund.
[Carol:] But I'm your client saying I don't want that advice.
[Philip:] If you choose, if you choose to invest in other funds, it's entirely up to you again. The choice is yours.
[Carol:] Yes, right. But how are you going to cover your back if I?
[Philip:] I'd certainly need to er, er, need to make a comment to that effect on the back binding at the end of the side
[Carol:] Absolutely. Because how does Philip know that in five years' time, I'm not going to ring him up and say, hey you know when you recommended me to invest my money in the Japanese fund, well it's just gone through the bottom of the market. That was bad advice, etcetera, etcetera. So, if the clients want to invest in a fund, they can do. You can advise them whether they decide your advice that's fine, but what you must do is get them to s, you must write it on the plan your future document, the advice you gave, what plan you decided to do, and I would actually get him to initial it as well. O K? Good. So we now must be with John. John, when can the client change their fund allocation? So let's say this client has got his thirty pounds a month Covermaster, er, and he's decided that he wants to invest his Covermaster in a Japan fund. And he wants to change his allocation, what do we mean by that, and when can he do it?
[John:] I don't know when he can do it.
[Carol:] Think now.
[speaker001:] At any time.
[Carol:] At any time. And what does it actually mean? I think it's,... it's probably put into any chosen fund. Let's say he wants a managed fund. O K. Now what are we actually talking about by changing? Something being, the, the units in one fund at the market price, for the er, units in the other fund Oh you mean tip in those into, from the Japanese fund into the managed fund. Tipping them from one bucket to the next?
[speaker001:] Well
[Carol:] Mm
[speaker001:] Change them from fund to fund.
[Carol:] Change them from fund to fund, mm. A bit of confusion. Can you help out this table?
[Gerald:] Erm, the value, what you'd actually do, the value of the Japanese fund at the bid price,, would be allocated to the, at the bid price to the managed fund. It would be the amount of I would anticipate the managed fund.
[Carol:] And what do we call that?
[Gerald:] We call it a bid to bid, or a switch fund
[Carol:] Switching. Which was a wonderful explanation, and absolutely true. Do you know how much it costs, Gerald, to switch?
[Gerald:] Around eigh, nothing for the first one, and eighteen pounds after that one.
[Carol:] No it's all eighteen actually. It's all eighteen. Brilliant answer, but he didn't answer the question I asked.
[Gerald:] Which was?
[Carol:] I asked about changing. [LAUGHTER] That's absolutely true about switching. What about changing?
[speaker001:] Future allocations. Future
[Carol:] Future allocations, yes. So here we are in January, my premiums are going into the Japanese fund, I want next month's, February's to go into the managed, that's just changing, and it leaves these Japanese funds invested, here. If I want to switch I tip from one bucket to the other, we'll charge him eighteen pounds, and we're absolutely right, as Gerald says, we do it on a bid to bid basis. So changing into the future, you can do it at any time, what it actually means, it'll affects the next month's premiums, and switching, er, it's on a bid to bid basis, from one fund to the other, and we charge them eighteen pounds per occasion.
[Gerald:] Can I have a point please.
[Carol:] What's this? Shall I give him a point?
[speaker001:] no, no [LAUGHTER]
[Carol:] We said no, I, I, I'm doing everything that table says at the moment, so no, but I'm going to give one to Shirley because she got most of the answer and then she came back with the right bit at the end as well. So, right, switching and changing. O K. Erm, let me just have a quick look through and see what I've asked those, definitely. Right, er, David, surrender value? end of side one.
[speaker001:] [LAUGHTER]
[Carol:] Would you like a bit of advice?
[speaker001:] No, no,, we knew, we knew. [LAUGHTER]
[Carol:] We said no, oh, I, I, I'm doing everything that table says at the moment, so no, but I'm going to give one to Shirley because she got most of the answer and then she came back with the right bit at the end as well. So, right, switching and changing. O K. Erm, let me just have a quick look through and see what I've asked first, definitely. Right, er, David, surrender value. A client wants to take, to cash in their plan, what do they get?
[David:] What do they get? They get the bid price of the units in the fund, their allocation of the units in the fund.
[Carol:] Yes. If they want to cash in their plan, any units they've got allocated to their fund, they get the bid price. Brilliant, O K. Erm,... John, no. Janet, if somebody wants to take a partial surrender, I E, some of the cash from their fund, can they do it and how much will we charge them?
[Sue:] Yes, they can.
[Carol:] I was sort of telling you that bit.
[Sue:] Yes, er, eleven pounds.
[Carol:] Absolutely, right. Excellent. Erm, an investment bonus, Kim, is paid, how much is it, and when is it paid?
[David:] Erm, an investment bonus is paid annually.
[Carol:] That would be nice, but no.
[speaker001:] [LAUGHTER]
[David:] Ah,
[Carol:] It would be nice.
[David:] No
[Carol:] Could your team help Kim out?
[speaker001:] The pay five, er, the amount if five percent,
[Carol:] yes
[speaker001:] And it's paid after the client's seventy fifth birthday
[Carol:] Brilliant
[speaker001:] Providing the plan has been going for ten years.
[Carol:] Brilliant. Five percent bonus, should the client reach seventy five, and still be hail and hearty, and paying his premiums. Excellent. O K. Erm, let's go back to our fund and the list of charges.... We've looked at the expense charge of one pound nineteen, the cost of running a policy taken out each month. We've established that if Shirley was our client, the cost of life cover would be taken out each month, erm, Sue can you give me another charge, that is levied?... David's trying desperately to throw his voice again.
[speaker001:] [LAUGHTER] It's a terrible scheme.
[Carol:] I don't know.
[Sue:] Oh yes, the initial management charge.
[Carol:] The initial management charge, how much is that?
[Sue:] How much?
[Carol:] Mm
[Sue:] Bid offer about five percent.
[Carol:] Which is?
[Sue:] five percent.
[Carol:] Five percent bid offer. O K, well done, David, but no points for cheating.
[speaker001:] [LAUGHTER]
[Carol:] No points for cheating, but you're absolutely right. The difference between the buying price and the selling price, five percent. Which is the buying and which is the selling price, Ilias, of the units? The bid price, or the offer price?
[Ilias:] It would be the offer price, the price of the company.
[Carol:] Yes
[Ilias:] And the bid price, the price that the er, client.
[Carol:] Yes, yes. The bid price is what the company will give the client, and the offer price is which the client has to buy off the company. Bid to get rid, so bid is the selling price, is the easy way to remember it. O K, good. One, two, three. Erm, Andrew, another charge, you've got the initial management charge, one more?...
[speaker001:] Erm,
[Carol:] Team?
[speaker001:] Waiver of premiums, no we've done that. We've done it.
[Carol:] We've got that.
[speaker001:] We've got the expenses charge.
[Carol:] You're right, it is a charge.
[speaker001:] Er, setting up charge? Establishment of... The, er adding charge.
[Carol:] Annual management charge, taken out of the fund. How much is it?
[speaker001:] One percent.
[Carol:] Did you hear him?
[speaker001:] Yes
[Carol:] One percent, yes. Phew, given them their bonus, yes, well done. Right, so those are the charges
[speaker001:] [LAUGHTER]
[Carol:] Good, O K, let's see how we get so far, before we come to the last question. Ten, twenty, thirty, thirty eight. Ten, twenty, thirty, thirty two. Ten, twenty, thirty, thirty eight.
[speaker001:] Oh dear.
[Carol:] Right, this is how the last question works. I'm going to give you, as a table one of the features of the plan, I'm going to ask you as a group, but only one of you needs to write it, to write every single thing you can think of relating to that set feature. Every bit of information. Then you've got a possible ten marks. You give me all the information. If the other two teams can pick up on a piece of information they missed out, they get a mark and you lose one of your ten. Simple really isn't it? Right, the three er, things we're going to look at are, you only need one per team, but I'll tell you what they are, waiver of premium, the insurability option,... or index linking as it's sometimes called, and the paid up option. Right, who's in third place. Third place, we have Middlemarch. Which one would you like to choose as a team?
[speaker001:] Erm, I'd like W O P.
[Carol:] Right, so off you go, write as much as you can about W O P. Right, Wall Street which one are you going to go for?
[speaker001:] What do you want? You pay for right of allocation of units. Erm,... insurability option, the middle one. Insurability option. Which leaves you with The paid up option.
[Carol:] The paid up option, right. O K, then two minutes. Write down everything you can think about it. The paid up option.
[speaker001:] [quiet talking amongst themselves]
[Carol:] They're fighting over here.
[speaker001:] [LAUGHTER]
[Carol:] It's alright. Could be crucial this, Wall Street and the Losers, they're neck and neck here you know.
[speaker001:] [LAUGHTER] I think we should have a point for because we're well behaved. [LAUGHTER]
[Carol:] I think you've got a good point there, yes, I might er, it used to be, well you really are amazing,
[speaker001:] [LAUGHTER] Are you sure there's actually ten things you can say about these?
[Carol:] There probably aren't, no.
[speaker001:] [LAUGHTER] I've only done one. [LAUGHTER] For one more tip we can, it'll be a miracle. What have Wall Street got, Gerald? They've got waiver of premium. No they've got insurability option. Have they? [LAUGHTER] [whispering] []
[Carol:] Right, are we ready?
[speaker001:] We've got more than one, or something.
[Carol:] Are we ready?
[speaker001:] Sorry, [LAUGHTER]
[Carol:] Nobody's answering.
[speaker001:] [LAUGHTER] yes, yes.
[Carol:] Well, let's have this team for answering then. I like polite teams.
[speaker001:] [LAUGHTER]
[Carol:] Oi, you lot.
[speaker001:] Sorry, yes. They're not polite, deduct a point.
[Carol:] [LAUGHTER] Right, what we're going to do now, then we will start with who's got what. O K. John, are you going to, John's going to read out all the features that his team have come up with. If you can think of anything that he's missed out, you stand a chance of winning a bonus point and he loses one of his ten points.
[John:] Right.
[Carol:] So off you go.
[John:] Right, right fine. Waiver of allocations, I E, a reduction of units. O K, two, er,rep, units, what have I written?
[speaker001:] [LAUGHTER]
[John:] Sorry
[speaker001:] The number of units.
[John:] The number of units is reduced by age and sex.
[Carol:] Right, yes.
[John:] O K. Er, not available on high-risk jobs.
[Carol:] Right
[John:] Not available on h, housewives, unless they can prove that they would have been in employment, would have been, erm, that they will have been
[Carol:] Will be, good
[John:] They would have been in employment, erm, only available up to the age of sixty, then cancelled
[Carol:] Two's, Christine
[John:] Erm, effective due, comes into effect after twenty eight weeks of illness or disability.
[Carol:] It comes into effect after twenty eight weeks of an illness or a disability, yes.
[John:] Er, available on joint life, first claim.
[Carol:] yes
[John:] Erm, on joint policies, the amount of units taken from the fund is the sum of the two lives, I E, up to seven percent.
[Carol:] Yes, yes, got to.
[John:] H I V not permitted.
[Carol:] yes
[John:] Erm, that's Not available on joint paragraph, right, that's what we've got then.
[Carol:] It is, it is.
[John:] That's what we've got. So it's one, two, three, four, five, six, seven, eight, nine
[Carol:] Right next table, anything that they've missed out?
[speaker001:] Yes, if they can't have the option in the leaver, then they get the extra allocation of units.
[Carol:] He likes this allocation of units.
[speaker001:] [LAUGHTER]
[Carol:] Can be, yes, why not, why not, yes, a bonus. Anything from this table.
[speaker001:] Yes, the benefit is only payable up to the age of sixty.
[John:] We had that, I said that.
[speaker001:] He said that. Are you sure?
[John:] yes
[speaker001:] It is available to housewives.
[Carol:] He said that, you're just, he, he, he said that it's available to housewives but only if they erm, will be going back to work prior to the claim, but you must be employed prior to the claim.
[speaker001:] Yes, I didn't hear him saying that they waive the payments from you when, I didn't know if you were meant to?
[Carol:] I didn't say, he didn't say anything about er, Abbey
[speaker001:] No, no
[Carol:] Waiving the premiums, no.
[speaker001:] So basic payments, with er, well I suppose, no, no, I won't
[Carol:] They said, they said, they only deduct six marks because they're only payable up to sixty?
[John:] We did
[Carol:] Did you say death or? You don't remember?
[John:] No we didn't say that.
[Carol:] Oh, you just lost two marks worth then, payable up to the end of the term or er, on death. O K, well done, so we've had two bonuses, so that must give you eight marks which makes you forty one. So if you find lots of things to say about the others, you're still in with a chance here. Right then Wall Street, what, what is er? Insurability option,
[speaker001:] Yes
[Carol:] Who's going to tell us about it?
[speaker001:] So you do it after five years.
[Carol:] Every five years, yes.
[speaker001:] Then if it's not going to be taken up on one of those five years, you have to leave that payment, you lose it.
[Carol:] If you don't use it you lose it.
[speaker001:] You lose it, and you've got the option to take out a new plan after the five years.
[Carol:] A new plan
[speaker001:] To make up, to make up life cover, life cover as required.
[Carol:] To make up life cover, yes.
[speaker001:] Erm, it's valid up until the age of sixty five.
[Carol:] yes
[speaker001:] No further medical evidence is normally required.
[Carol:] yes
[speaker001:] And also you have the option to increase on special events I E, divorce, adoption, marriage, or on mortgages.
[Carol:] Right, O K. Good.
[speaker001:] I couldn't think of any more.
[Carol:] Anything?
[speaker001:] Well they haven't actually said what it is.
[Carol:] tell me then? alo
[speaker001:] [LAUGHTER]
[Carol:] Actually you have missed out one very crucial point.
[speaker001:] The opportunity to increase
[Carol:] No he did say you could increase the sum assured
[speaker001:] He did say that. H I V people can't have it.
[Carol:] H I V people can't have it.... Anyone?
[speaker001:] And your premiums in line with erm, increase in inflation,
[Carol:] Which is measured by?
[speaker001:] The Retail Price Index. I thought he said that once. Or a proportion of it
[Carol:] Hm
[speaker001:] You can take a proportion of it, you don't need the five percent.
[Carol:] So if you take a proportion, then what happens?
[speaker001:] You have to have the same proportion next time.
[Carol:] Right, if you, he said if you don't take it you lose it, which is absolutely right. But if you take a proportion of it, you're only offered that proportion again. I think that's it. Yes? Erm, there's something about additional insurability. Now, you actually answered about additional insurability, I didn't ask you, it sounds the same, in fact it's totally different, because as you say, the option to take out more life cover on birth, marriage, and adoption,
[speaker001:] To a maximum of twenty five thousand
[Carol:] To a maximum of twenty five thousand, yes
[speaker001:] Or mortgage
[Carol:] Forget mortgages, we're talking Covermaster, yes, it's nothing to do with mortgages. O K. So I just wanted to clear that, twenty five thousand Sorry,
[speaker001:] Yes, or, or some percentage of it.
[Carol:] yes, it's a maximum of twenty five thousand. Yes, or twenty five percent of the original sum assured.
[speaker001:] There is something in that actually charging a percent it gives you an option that you could do something which would mean that the option wasn't cancelled. Erm, and it was going on about it was something to the sum insurance? I don't, I forget what it was now.
[Carol:] Erm, well, I'm not sure, but if you find it erm, ask me, because I can't relate to it.
[speaker001:] Yes, I think it was relevant to computers, yes, erm, yes.
[Carol:] But I'll just pick up, if the original sum assured was a hundred thousand, and you need, and you took the additional insurability option, you could obviously have twenty five thousand with is a quarter, and that's the maximum you can have anyway. If it was a hundred and fifty thousand you could still only have twenty five thousand. But if you'd, if the original sum assured was only sixty thousand, you could only have a quarter, so you could only have fifteen thousand pounds maximum. Yes, O K. Good, so how many bonuses. One, two,th, no, no, sorry, but di, who did waiver of premium? You did, didn't you, so
[speaker001:] No, no, no, we didn't,
[Carol:] Who did waiver, you did, right, O K. So, one, two, three bonuses off, because you, there was one from before. So that gives you seven, which brings you up to thirty nine, forty six, taking into account that one. One, knock these off, otherwise I shall confuse them. Forty six. Right, waiver of premium.
[speaker001:] No We've done that We've done that.
[Carol:] No we're not, paid up option. Thank you very much.
[speaker001:] [LAUGHTER]
[Carol:] Sorry about that. Paid up option, for the Losers.
[speaker001:] O K, erm, premiums are stopped for er, if you can't afford to carry on paying them, the premiums are stopped, and your fund is continued up until the p, the point where the charges exhaust the funds, providing it's over a thousand pounds. If it's under a thousand pounds, you can't get the money back through funding, and the policy is void.
[Carol:] Mhm
[speaker001:] Erm, if it's paid up you can start paying again at some point in the future, but you have to pay an extra one-off charge, to do it, I think.
[Carol:] At some point in the future?
[speaker001:] Up until the funds are exhausted. Yes, before the funds are ex, exhausted.
[Carol:] Yes, yes, that's right, that's absolutely correct,
[speaker001:] Erm, you can't choose to make it paid up, it has to be paid up because the premiums aren't being paid.
[Carol:] Right, good, O K. So, you've got a client who for whatever reason, is, is unable to er, afford the premiums, and providing they've got a thousand pounds in the fund, they can elect to the, the plan made paid up, whereby the life cover is sustained by the fund and all the other charges, and it's sustained until the fund runs dry.
[speaker001:] Yes
[Carol:] Anybody anything to add to that? I think, the only thing I could add is that you've got twelve months in which to restart the payments. It's a twelve month period.
[speaker001:] I didn't know that.
[Carol:] O K, erm, and you do have to actually pay back the premiums other people would stop and start them at random. So if after five months you started paying it again, you've got to pay the previous four months' premiums. O K, so,
[speaker001:] How many's that? Eight. No, no, we haven't Nobody else got any more points.
[Carol:] What do you, what do reckon, do you think they've got a good case for their ten points?
[speaker001:] Five, five. It wasn't explained properly.
[Carol:] Five, it wasn't explained properly. We can find lots of reasons for not giving them ten points, couldn't we really, if we really worked at it.
[speaker001:] [LAUGHTER] You didn't say we couldn't, we didn't say the level of cover,
[Carol:] I mean they've been a rabble all afternoon anyway, haven't they? Yes?
[speaker001:] [LAUGHTER] They've said things that weren't true to say, couldn't they, I mean, they thought it too simple to even say.
[Carol:] Absolutely, just to make more points, they made a few things up,ex, absolutely. They can still have their ten points, though.
[speaker001:] [LAUGHTER] Hooray.
[Carol:] So, well done the Losers, at great expense, we have a prize for you.
[speaker001:] [LAUGHTER] Oh, lovely. Well, Mm, this is nice,
[Carol:] The bonuses well, it might, it might actually work.
[speaker001:] No it doesn't. [LAUGHTER]
[Carol:] I hope it doesn't change it, but they should do. Right. O K, erm, hopefully we've had a bit of fun, but at the same time, we go, we went through all the technical information. Er, tomorrow you will have an exam on Covermaster, it's not going to be the type of exam that's going to be, what's the minimum premium?, it's going to be more looking at potential clients, and what they're going to want from the plan. So you're going to be looking at things like additional insurability option, waiver of premium, index linking and paid up option. Those are the features that you're going to need to know, and how they relate to your clients. More so, that it's a twenty pounds minimum premium, because they're going to ask you to apply some of that knowledge through the questions. But I really don't think it will be a problem. If we could have erm, a coffee break now until ten past three, and then we'll enter the last phase on the, on the Covermaster, one of the last areas which is features to benefits. Any questions for me before we finish? Right, quarter of an hour coffee break then please.
[speaker001:] Get the notes. Change the name to the Winners now,
[Carol:] [LAUGHTER] Yes. Yes.