[speaker001:] It's er, courtesy, common courtesy. yes, and not going out to find your own knowledge really. You reach a point where you're not certain, then be big enough to say, I don't know, but I can phone our man who does. [LAUGHTER]
[Carol:] Absolutely, absolutely no problem. Right, let's get
[speaker001:] Can you park at the back? Carol, or not?
[Carol:] N, er, no, probably no, because we've just, we've just got, we've got three spots, which are ta, are taken most of the week you see, so it's just a bit yes.
[speaker001:] [LAUGHTER] It's only a very short walk down, if you walk through the shops you don't have to go all the way down, you can actually come, just walk past that shop and go down the middle, and you come out through the car park.
[Carol:] Are we ready? Smokers?...
[speaker001:] I've never been on tour, but I've been to the visitor's centre, and Yes. [incomprehensible] Erm, on page eleven, there's a chart where Because you can all get these things like Guy Fawkes for, but also transcripts for.
[Carol:] Welcome to the last session of the day. Yes, er, and we're looking at living assurance.
[speaker001:] yes
[Carol:] Can I explain all those booklets that I've put out on the table? First of all, there's two booklets here, one's a Covermaster and one's for living assurance, which has got your questions answered at the bottom. It's very good for revision, because it's the type of thing your clients are going to be asking you, and it's the type of thing we're going to be asking you tomorrow. So it's a nice way of revising tonight. It's similar to C V T, you really haven't got any notes technically today, so it, it's nice, erm, booklet to use. There's also the living assurance one the same with questions answered. I've also given you a living assurance rate book, because we'll be looking at both the rate books in a minute. And the living assurance, the guide to er, the illnesses that are covered. The critical illness, just a very brief guide there.
[speaker001:] I think we'll need a box.
[Carol:] And a pen, one of those each. One of those each, and finally erm, a circular put out by Abbey entitled Women at Risk, which we'll be talking about.
[speaker001:] yes
[Carol:] Right, so yo, you watched er, Dr. Marius Bernard, erm, the South African, what did you think about the message that came across in the film? What did you think about critical illness assurance?
[speaker001:] The importance of insurance.
[Carol:] It's a very powerful message isn't it? I mean think er, life assurance erm, obviously it's the to have fails, but if somebody is eligible for, and can afford living assurance, it's got to be a brilliant product.
[Philip:] I would think there must be a large part of people out there that could benefit from their estates isn't there? I'm, I'm never
[Carol:] You're absolutely right, Philip. O K Sue? Can you carry on your domestic discussion tonight, yes? [LAUGHTER] Erm, yes, you're absolutely right. Let me tell you a little bit about the history. Er, when we introduced Covermaster, erm, thirteen years ago or so now, it was a unique plan. It was actually plagiarised by sixteen other life companies within the first six months. It was copied. One company still calls their whole of life protection plan Mastercover, [LAUGHTER], that's an idea of how much they copied it [] Erm, but of course, very quickly things moved on. Other contracts were available. Er,b, but we were the first company, back in, I think 1987, to bring out living insurance. It was the first company to actually insure against critical illnesses. It had been done before of course. South Africa in the mid-eighties, it was er, common in the States. But we're the first major company in Britain, so our is second to none, our experience with the contract is second to none. It's very, very powerful. You need living assurance because you're not going to die, you need living assurance because you're not going to die. When you look at er, the critical illnesses that are covered, heart attacks, cancer, stroke, etcetera, etcetera, etcetera. I mean is there anybody here, who honestly can't think of anybody who they know, I mean, perhaps if I try and rephrase that, is there anybody here who cannot think of somebody who's suffered an illness that fits into that critical illness er, category. I mean we must all know somebody who's had a heart attack, a stroke, cancer etcetera, etcetera. So we, we understand the implications, and to the money to actually put your life to right, is an absolutely wonderful contract. I said we've got er, the best claims experience, I've given you the one pamphlet, Women at Risk, which points out, women used to say, oh, a stroke it won't happen to me, cancer it won't happen to me. But that is quite useful to show what we've already paid out to women,
[speaker001:] We, we've got, three over there.
[Carol:] Have you got that one somewhere?
[speaker001:] Yes,
[Carol:] Have you already got those?
[speaker001:] No
[Carol:] There erm, somewhere along the line, right. I'll, I'll get you some in a minute, er, I'll carry on if er, if er, you don't mind I've got, oh here we are, I fo, I hadn't given them out sorry.
[speaker001:] Thank you.
[Carol:] So that's very useful to show you how women have been affected but this is on our claims experience. Erm, if you turn over the page it says seventy eight percent of female claims have been on the diagnosis of cancer, and it gives you a breakdown of the condition and the age when diagnosed. All very powerful. A pamphlet that is equally powerful is one called Abbey's Number One for Claims Experience, but unfortunately we don't have any other copies at the moment, so I will leave one on the side so you can look at it. But do ask when you get back to the branch, because it samples claims that Abbey has, have had, erm, it reiterates the statistics that you've just heard, the likelihood of somebody suffering with cancer, heart attacks, strokes etcetera, it er, gives you the ages er, if you choose, write in statistics, the one you've been listening to. Current age, twenty five, the likelihood of somebody having a heart attack or developing cancer before sixty five, heart attack one in ten males, one in thirty nine females, cancer one in ten males, one in ten females. It's, it's horrendous those statistics when you think about it. If we can help people in those circumstances it's got to be a brilliant product.
[speaker001:] What, what was that leaflet called please?
[Carol:] It's Abbey Number One, Abbey, Abbey Life is Number One for Claims, because we were the first company er, if I put it over there now, it will stop me collecting it and taking in out. They are available as I say, but at the moment our's are being updated. So it's an absolutely brilliant product. Now,..., if we consider ordinary life assurance, somebody first said to me that er, maybe the best erm, sales manager, or sales promoter or publicist or, or whatever, was the person who actually had the idea of calling death insurance, life insurance, yes? How could you fancy ringing up your potential clients, and say, Hello, it's Carol, I'm calling from Abbey Death. [LAUGHTER] it doesn't sound too good does it? But that's what it is isn't it? Ordinary life assurance really means death insurance. What happens if, let's have a look, and compare it with critical illness. On death, the premiums cease, the sum assured is paid on the living assurance or the Covermaster Plan, living expense is reduced, the widow could work or remarry, a potential answers. Critical illness, you've got carry on paying the premiums, with no lump sum paid on living assur, er, on life assurance, the living expenses are likely to increase, because you may have er, somebody who's disabled, paralysed or whatever, there's no chance of the widow returning to work because she's looking after person who's er, ill, and obviously she can't remarry because she's not widowed at this point. So if you compare critical illness and death with what happens at the time, and I've got to ask you this. What carries you away? Well on death, obviously a car first carries you away, if you're ill it's an ambulance. And one simple statement, which do you see the most of when you're travelling around? How many hearses, how many ambulances do you see?
[speaker001:] Ambulances.
[Carol:] Yes, how many
[speaker001:] They take them away at night in Telford, so you only see them [LAUGHTER]
[Carol:] So it's a brilliant product and there's got to be a need for it. You don't have to die. This year, almost a quarter of million people were known to have cancer. A hundred thousand will still be alive five years later. A lump sum, we won't ask for it back, and maybe it's been useful for them to adapt their lives in the meantime. Brilliant concept. What I want to do though is, is go through the plan, highlighting the differences. It was based on the Covermaster Plan with added extras. So I don't want to go through all the things that are the same, I want to highlight the differences, and maybe it'll help you in your mind to distinguish between the two products as regards examination and the questionnaire tomorrow. First of all with living assurance it's a whole of life plan that pays on, well we know it pays out on death, and we know it pays out on serious illness, but after that, the pay-out is obviously vast compared with Covermaster. Permanent disability, major organ transplant, paralysis, multiple sclerosis, blindness, terminal illness, and loss of limbs. All of which we have in this brochure defined for us. Now one of the areas we can get involved in when we're talking to our clients is well what do they mean by cancer? Does it count as all cancer, what's a definition of a heart attack. This is quite useful for you to refer to, this booklet, but do please tell your clients you're not a doctor, it's very much up to the client's doctor and our medical underwriters, as to whether we pay out or not. This is just a guide, but a very useful guide. Er, for example, we're talking about a heart attack damage to heart muscle, we're talking about strokes where there's a loss fl,bl, sorry, the flow of blood to the brain, erm, we're talking about cancer, we're talking about an abnormal growth of cells, but not all cancers are covered, a skin cancer which isn't life threatening, isn't covered, erm, as a result of perhaps too much sunbathing etcetera, whereas a melanoma, a cancer that comes into er, a great lump on the skin which can be life-threatening, obviously is. So you have to sort of look carefully. The definitions are here, erm, loss of limbs, yes? Paralysis, when a limb is paralysed there is complete loss of movement and feeling, if you're talking about paralysis, loss of limbs, we're talking about the severance, would you believe, of any two limbs.
[speaker001:] Would you tell people if it was from above erm, the elbow or above the knee? And also it would.
[Carol:] And also?
[speaker001:] Erm, actually there was a mix-up with that yesterday, we were told one limb, One or more limbs Two Two limbs, Two
[Carol:] Two limbs, two limbs, for loss of limb, yes, yes.
[speaker001:] yes
[Carol:] So what I'm saying to you is if you like to refer to this, this will give you the clear definition of what, what's covered in each case. Who can have this plan? Well, the key point there is there's no joint life, last claim. You can write it own life, joint life first claim, or life of another, but you can't l, write it joint life, last claim. Why not, David?
[David:] Well erm, well probably because it's not going to benefit the person.
[Carol:] Absolutely, does it make sense for, for husband and wife over there to wait for the second one to have a heart attack, or the second one to have a cancer before it pays out,
[Gerald:] Come on
[Carol:] It really doesn't make sense does it? What was that Gerald?
[Gerald:] I said, come on have a heart attack.
[Carol:] [LAUGHTER] come and have a heart attack []
[speaker001:] [LAUGHTER]
[Carol:] So it doesn't make sense, and obviously it isn't er, written joint life, last claim.
[speaker001:] Sorry, can I just ask a question there?
[Carol:] Certainly.
[speaker001:] In the question of no joint life, last claim,
[Carol:] mhm
[speaker001:] Right,... I've forgotten what I was going to ask now, no it's alright, I was thinking about the circumstances, I was thinking about er, er, a dependent left behind you, sorry.
[Carol:] Yes, you, you've sorted it in your own mind?
[speaker001:] Yes, yes.
[Carol:] Good, minimum premiums are the same, twenty pounds and two hundred, but do remember that existing clients, could have a reduced minimum premium of sixteen pounds or a hundred and sixty. What do we mean by an existing client, Shirley? A client that's already got some insurance. Absolutely, and they can actually retain that policy with you that evening. It doesn't have to be one that's issued. So if you start thinking about our client that we've previously erm, who we identified wanted fifty seven thousand pounds worth of life cover, I believe. Maybe the solution would be to put some of that in living assurance, and some of it in Covermaster. Whatever, if we're writing two policies, he can be classed as an existing client, so we could have a reduced minimum. However, do we talk minimum premiums to our clients.
[speaker001:] No
[Carol:] If you tell somebody you can it for as little as sixteen pounds per month, guess what, that what they'll have.
[speaker001:] [LAUGHTER]
[Carol:] If you tell them that to get exactly what they need it's going to cost them thirty pounds a month, and isn't it a brilliant contract, they'll probably have that. O K, let's move on to maximum benefit. What's the maximum benefit on a Covermaster Plan?
[Janet:] Five hundred thousand pounds.
[speaker001:] Five million
[Carol:] Five million, or if, five million, we might do a little bit of reinsuring on that one, don't quote me. Erm, the maximum benefit on living assurance is the figure that Janet come up with just, half a million, five hundred thousand. That's actually on all critical illness cover plans, because if they've got a living assurance, or they've got some other plan that's got critical illness benefit, it's the total maximum that Abbey will insure them for, for critical illness, for heart attacks, stroke etcetera. And includes Keyman cover. It includes Keyman cover. This is an interesting statement. If somebody has er, life cover, and living insurance is over a hundred thousand, they will be subject to the need being established. Whatever does that mean?
[speaker001:] They've got to prove that they actually need that much cover.
[Carol:] Right, so how are they going to prove it?
[speaker001:] Well by showing that their dependents will need that sort of income to come in.
[Carol:] Income, we're looking at income. We're looking at financial underwriting. Anything above a hundred thousand, and we're looking at financial underwriting, we're looking at basically four times salary. So if we've got somebody earning nine thousand, they're going to want to know why they're insuring themselves for a hundred thousand on living insurance benefit. O K, so financial underwriting, is on a hundred thousand and above, you look at four times salary. Erm,... Right, erm, we get this thorny question now about how to establish how much somebody needs for living assurance. If we just go back to the plan in the future, erm, and we move down to this section here, let's look at the questions we're asking. [reading] If you were to become critically ill or disabled, would you like some or all of your life assurance capital sum to be paid to you immediately, if so, how much? [] Now that's a difficult question to ask people, yes? How much would you like in the event of a heart attack or a stroke, it's very difficult for them to decide. Erm, what type of things do you think would actually affect that decision?
[speaker001:] Size of the mortgage.
[Carol:] Size of the mortgage, that could well be the first point of call isn't it? Which most of us will have a mortgage protected against death, I E, the sum assured is released to repay the loan, what happens if we get a critical illness, heart attack, stroke, etcetera, and can't work. You're still going to have problems repaying your mortgage. So ideally, the size of the mortgage is a good starting point. What other things do you think we could use to determine how much?
[speaker001:] Erm, If they'll need special care.
[Carol:] Yes, but lo, but then we've so, we've got to pre-judge a little bit then, as to what illness they're going to have, and that gets a bit difficult. But you're right, we're, we're taking into account extra costs.
[speaker001:] Age and, sorry Talk about That's O K, it's about the children Er, Carry on, you go then If the children are er, privately educated, and it's high, high expenses that you would want to carry on with.
[Carol:] It might well be something that is very important to you to maintain, even if you can't carry on working through illness. Absolutely right.
[speaker001:] Age, because you might be considering well, er, if something happens dramatically, at say fifty, fifty two, or something like that, you might just go and retire, so you would be set up in that respect.
[Carol:] So how would you determine how much you need? How much the sum assured would be
[speaker001:] Erm, well by virtue I suppose really, of your operating need, if you like, your, your yearly operating expenses.
[Carol:] Yes, you're, you're approaching it from er, a similar method to Sue over there, you're saying how much would I need to, to survive and you're talking small businessmen really, aren't you? In that effect, yes, yes?
[speaker001:] Sort of, yes.
[Carol:] You could be looking at a minimum of one, two, three years' salary, because you might be thinking well at least that'll give me a chance to get on, to get back on my feet. I mean it's a fact isn't it, that there are a lot of people, the first heart attack is just a, a danger signal, you know, beware, take things easy, look after yourself, you've been putting your body under too much stress. But what happens if you're not financially secure, is that you're off work with a heart attack, you're rushing back to work because you need your income. You're putting your body under more stress. So you have another heart attack. Yes, it actually gives you time to recover.
[David:] It could be length of time your children have got in, in further education. If they're already in college, you might
[Carol:] Could well be because you're looking at making sure that they, they fulfil what is a dream for you and for them. It's a similar point to Sue, was making. Absolutely. So it, it could be just debts.
[speaker001:] Can I just ask a question. It's just slightly off er, the track at the moment, if you were writing a living assurance plan for someone, and they'd already got a Covermaster plan,
[Carol:] Mhm, right
[speaker001:] Or, or other benefits that would actually kick in at a certain point, er, of death, I mean obviously this would actually help at erm, diagnosis, and you're writing into this, sort of to cover all of the things that we're talking about, and they get that, and then they continue to live, the rest of your plans are all then thrown out aren't they, because you've got all those things that you've put into place for death, sorted out in the years before.
[Carol:] Right, well, well, actually yes, what, what you look at, is, is what's important to you and you put a cash value on it, and it might be the mortgage, it might be education, it might be giving yourself a couple of years' salary and paying debts or whatever, er, and the security of knowing that O K, if I die, I'm not leaving a problem for my family, but at the same time if I'm in a situation where I get a serious illness and I can't bring in an income, I'm securing my, my, my future in that respect. So of course, after that, your uninsured, which is absolutely true, but at the same time, erm, you're really just bringing forward the pay-out when it's needed most. It's, it's a brilliant contract for single people. You can't, people, single people without dependents are really not very interested in life assurance, because on their death they're dead, you know, as long as they don't leave any debts they're not too bothered. But suddenly they can't be independent if they have er, er, a, an illness, a problem. Suddenly this means a lot to them. Yes? Critical illness cover, that's great. Excuse me a minute. [door knock]
[speaker001:] Sorry to interrupt, I've come to collect the packet.
[Carol:] Oh right, it's the bag, sorry there isn't one tonight.
[speaker001:] See you then
[Carol:] Thanks for coming then, yes, bye. That's good, I forgot the post. Erm, where was I? What was I talking about?
[speaker001:] Single people.
[Carol:] Single people, brilliant isn't it? Er, there must be a worry in a lot of people, single people's minds what happens to me when I get older and in ill-health, how will I cope? Well if they can afford to buy in help and to sort their life out, you've suddenly got a product that they really want to buy. I mean this, this product, if people have got the health to buy it, because we're obviously not going to take on people that are in poor health, they can afford it, because obviously as they get older, the risk is greater and it becomes more expensive, it sells itself, it really does, it's a brilliant product.
[speaker001:] Presumably you can it can cost to an existing life policy
[Carol:] Absolutely, yes.
[speaker001:] So that even if you've these benefits, that other life cover would then go on to
[Carol:] Absolutely, yes, because an ordinary life policy won't pay out, so if you've got a combination of Covermaster and living assurance, you've got your life policy to pay out on death, and your living assurance to pay out on critical illness. And if it's a sudden death, well, they'll both pay out anyway.
[David:] Erm, to make it more affordable, you could reduce the life cover, by the amount of life cover on the living master.
[Carol:] Yes, yes you could. You'll find what you're doing er, and in a way, it's a comfort to you, that you take, you get all this information, and you take it away, and very often there's not one clear answer. You need to think about the person's circumstances, and that's where it's great, that you can come back and sit down with your manager, and he's going to say to you well what do you think. And he's either going to say well that's great, that's exactly what I would suggest, or have you considered this, have you considered that, which is a great security when you're starting. Er, when you're starting out and you're not sure of all, of all the options. There is a suggested minimum, but if, if, if it's right for the person and they can afford it, that a minimum of forty thousand pounds is, is, is er, er, an industry suggested figure of a minimum. But that's as I say, after looking at mortgage, salaries, etcetera.... Waiver of premiums, exactly the same, not exactly the same, sorry, very similar to er, as with Covermaster, it's automatically built into the first life assured, it's payable until you return to work, reach the age of sixty, or pay-out of a claim. I mean, to die is not absolutely correct there is it, because I mean you could actually have a pay-out on critical illness, which happens earlier. But very similar to Covermaster.... Built into the first life assured. Does that mean the second life assured can't have it?
[speaker001:] Presumably no.
[Carol:] No, it means they can have it as an option. Why's it built into the first life assured?
[speaker001:] It's likely the first life would be the man.
[Carol:] The first life, well it doesn't have to be the man, but if, if you write the application so
[speaker001:] It's the breadwinner
[Carol:] yes, the breadwinner, the main breadwinner, you're absolutely right. We're talking here of protection, of they can't have waiver of premium because of ill-health, they're not going to be able to have living assurance, so it, it's not an option really for them to have one without the other, because it's an automatic protection that, that really should be the basis of somebody's package of their health commitment to have it. So it's automatically built in to the first life assured, but it is an option for the second if they want it. That's waiver of premium.... Again, just to remind you of waiver of premium, this is exactly the same as the Covermaster so you really won't need to cover, copy this, it's charged as we established earlier, as according to your client's age and sex I E how old they are and what gender they are, you can see how the percentage of the premium is established. A joint life charge will calculated as the sum of the individual charges, we looked at that earlier, the maximum age at which waiver of premium can be added to a new policy is fifty five, next birthday. And can I tell you, that if we'd just done Covermaster, somebody could have picked up a point there. Er, maximum age on new policy somebody new can have waiver of premium who's fifty five next birthday. So that's, that should all be very familiar to you. H I V exclusion. That's an interesting one. We've got somebody who's got a living assurance policy with us, it's going to pay out er, on diagnosis of any of those serious illnesses, and then they contract H I V, which if they had originally, we obviously wouldn't give it to them, but they contract it after the policy is enforced. Do you think that we're actually going to pay out the sum assured?
[speaker001:] Yes yes
[Carol:] Mm, Gerald, Ilias, not sure, could do, maybe, yes? Erm, well, we will pay out except under current disability. So we will pay out eventually, but we will not pay out under the permanent disability clause. Er, H I V, the aids virus is a, a debilitating disease, we won't pay out initially because as soon as on diagnosis you could basically say they are, er, they've got a debilitating disease, but we will pay out as soon as the illness actually affects some other part of the body er, and moves in to another disease. Because you don't actually die of H I V do you? You die of something else?
[speaker001:] No, No what you get from it.
[Carol:] Yes, what you get from it. So we will pay out, er, any of the other serious illnesses, paralysis, major organ transplant, etcetera, death, but not on permanent disability. That's the only exclusion.
[speaker001:] It's not just because this illness is self-, it's self-inflicted er, cause, er, you've obviously picked this up from a variety of other er, I'd say, sources, but you also pick it up in you know, blood transfusions situation.
[Carol:] True, yes. Er, once the policy's enforced, we don't look at how somebody's contracted the illness. All we will say is you have a policy with us, you now have H I V, we will pay out eventually, because you, you're going to die, you'll probably die as they are then, or one of these other illnesses will be diagnosed, we just won't pay out on permanent disability.
[speaker001:] How much of a check do they actually go into if somebody makes a claim on that?
[Carol:] In what le?
[speaker001:] Well to check all the facts basically, because something like H I V, if, if you're not in a category that's obviously erm, likely to catch it, you know, how would they really know that you've got it or not?
[Carol:] The company you mean? The, the
[speaker001:] Well sometimes the people don't know, but how the company clarifies he had it, knowledge of things before your client contracted it?
[Carol:] Well, well there's two things really. The people, if they don't know about it, they can't erm, tell us about it basically. Erm, if they start to have an illness and it develops we'll obviously be talking to their doctor, I mean if it's apparent that they're blind on the form, well then, obviously we would looking the amount we paid, or, or, erm, basically come to some agreement on that. If it was obvious that there'd been a false declaration. If on the other hand if they got it genuinely after the policy was enforced, that's the risk that we take. That's really why the policy is there, isn't it? Er, the risks that peo, they will incur later on.
[speaker001:] Erm, just on that H I V thing there, is that, isn't it a bit confusing isn't it, in that we don't actually pay out on H I V full stop, on Aids full stop, it is, it's really the other, the other things.
[Carol:] They're going to happen aren't they, and H I V is the cause of it, but not, it doesn't cause the death of some oth, you, people don't die of H I V
[speaker001:] No
[Carol:] The, the, the body's immune system gets something further, some of the others
[speaker001:] No, it's alright, I was looking in here, because I mean, it, I er, you know, I saw in the er, when I looked in the manual it said it didn't pay out on H I V, so it. yes it is confusing.
[Carol:] It is confusing, perhaps it doesn't pay out on immediate diagnosis, only when one of the other illnesses takes over yes,
[speaker001:] And in which case, they've not paid out on the H I V, it's
[Carol:] It's later on.
[speaker001:] It's as a result of
[Carol:] And if they are going to pay out full stop.
[speaker001:] yes
[Carol:] It's just prolonging it a little bit.
[speaker001:] Sorry, just one other point on W O P there, I may have got it wrong, did you say earlier on that er, that if you get H I V, so the W O P benefit isn't payable, what about the al, did we say the allocation of W O P will still continue?
[Carol:] yes, you don't, er, once it's established it's not changed at all throughout the plan, so if you, if you get H I V, and you can't have W O P, it's just tough I'm afraid. But on the other hand if you, if get serious illness and, and W O P benefit comes into effect, you've got a load of benefit from it so it's swings and roundabouts, on that then.
[speaker001:] Ah, so you can still get the W O P benefits from, it's the same as the thing earlier on? It doesn't mean that the W O P is cancelled all together, when
[Carol:] If you've got H I V, you, you don't get waiver of premiums full stop.
[speaker001:] On anything, even if you, three weeks after you get run over, and
[Carol:] No, no you don't get it at all.
[speaker001:] That's a bit unfair isn't it? So if somebody gets H I, yes, because gets, takes out a policy at twenty five, gets diagnosed H I V at thirty, and they're still living, they haven't actually got full blown aids, and they can live for a hell of a long time afterwards, they're paying their W O P premium for a long, long time. You could have somebody on twenty five, who when they're twenty six er, contracting a debilitating disease, never goes back to work, and we pay their premiums until they die at sixty. It's the swings and roundabout argument isn't it? Yes, O K.
[Carol:] Yes, it's a bit difficult really. Some people win, and some people are losers
[speaker001:] Argue with you, and then we get the answers on what to tell the customers [LAUGHTER]
[Carol:] Erm, what happens if somebody makes a partial or full recovery? Do we ask for their money back?
[speaker001:] No
[Carol:] No we don't. It's er, our risk and the client's good fortune. And of course, you could say that, that could be happening more and more with the advances in medical science. People have been diagnosed with cancer etcetera, erm, in fact at the convention yesterday, they had some clients on the stage, one lady had been diagnosed with breast cancer, she got a pay-out from living assurance, five years later she's been cleared, and, and she's thrilled to bits about it. And they also had Roy Castle up on the stage
[speaker001:] Would she have continued a different level of cover?
[Carol:] Sorry? Would she have continued a different level of cover, She probably wouldn't have got them
[speaker001:] Of insurance cover after that?
[Carol:] She probably wouldn't have got any cover after that, she probably would have been uninsurable. Yes. What's not available on living assurance. Well we know that there's no joint life, last claim, but actually you can't take a partial surrender. You take some of the money out of the living assurance plan. Why do you think that is? You can't take some of the money out of the plan?... Why?
[speaker001:] It's not a savings plan.
[Carol:] Well it's not a savings plan, but in Covermaster, you can take some of the money if, if you need to, if, we'll tell you that the life cover might be, er, at risk, but you can't do that at all in living assurance. You either surrender it and take the whole cash, or keep it running, you can't take some of the money. It, it's really because as somebody gets older the risk gets very, very great, and it needs all the money that's built up in the early years to sustain the risk, the charges for the risk later on, in the later years. You do need all your money to offset that, so that we can charge you what we call a level premium throughout the period. There isn't really er, anticipating much spare cash.
[speaker001:] The benefit can't be reduced then to meet the fund in the way that er,
[Carol:] Well, I've got to be honest, if you actually ask and negotiate with the company, it can offer reduced benefits and reduced premiums to the client's circumstances, but it's not generally advertised.
[speaker001:] No.
[Carol:] Additional insurability option, you know the one for twenty five thousand on birth and marriage. It's not available on living assurance. It's not available. You can't offer people er, that. However, they can have the index linked insurability, they can increase it in line with the Retail Price Index without further medical evidence. This is actually brilliant. It's good on Covermaster, but if you think you can keep your living assurance in line with inflation even when you're likely to be coming into poor health, it is a brilliant concept. Right, so those are the unavailable features.... Just one more thing that may have been mentioned yesterday when Jess was going through the legal and underwriting session, this applies to both Covermaster and living assurance. It actually can be a selling pitch. [reading] Between the commencement date of the application and acceptance by Abbey Life of the risk, the life assured will be covered for death as a result of an accident, the lower of the sum assured or fifty thousand pounds. [] That's before we've even accepted them. So you're actually saying, you go to somebody's house, and you take an application, in the processing period, they die in an accident, we will pay out, whether we were going to accept them or not, we will pay out, but it's only on accident. The age of the older life, as long as they don't exceed sixty five next birthday, and they're not engaged in any occupation or pursuit that could be considered hazardous. So it's just an extra, erm, benefit that's on, on for most of our policies one way or another, still covered between formal acceptance. Shirley? Does that mean even before they pay their first premium? Well it could technically, it depends how you set it up. Er, you can set up these plans to start with a direct debit, which means it probably takes fourteen days to get that sorted with the bank, they'll allow fourteen days. I am still firmly of the belief that I like to walk out of the client's house with a cheque, because that's a commitment, and then the next premium comes out of the direct debit. So even if the associate has, has er, obtained the cheque but hasn't managed to get it in the next day, and he dies in an accident. We would pay out. We'd take the cheque as well though. Erm, we, you'll actually find companies er, are very good in these circumstances. When I was working Edgbaston, one of my colleagues went to see er, a couple er, one night. Came into work the next morning. Erm, the phone call rang, and it was the, the wife saying that her husband had died in his sleep that night. Now when Abbey looked at the policy, because he'd got the Covermaster policy, the cheque and everything, there was nothing there to indicate that there was a problem. There was no medical problem highlighted that he knew about that he should have disclosed on the form. It was just basically, one of those things, and Abbey paid out, because they said we would have done it, we would have accepted him on this anyway. Now you can't tell your clients this will happen, but Abbey will do, obviously like, like any life assurance company there is goodwill in that.
[speaker001:] But there is goodwill, we should make more of that shouldn't we,
[Carol:] Absolutely, but they don't, but they don't do they, I mean, bad news everybody wants to know about, but, but not good news. O K, so, that's really all I've got to say about living assurance, of all the, it's just got to be, a brilliant contract, and if you can afford it, you need it yourself. And if you can afford it, you need to sell it to all your clients, because it is absolutely brilliant. Any questions yourselves? It's gone quiet. Right, let's move on to the last session, where we're going to be looking at the rate books. Working out the cost of these premiums, and we'll start with the Covermaster, and we'll use your workbooks. So if you can find an example in your workbook, and you can find your Covermaster rate book, and you'll also need a calculator. Ah, yes, I think it was, because I had it after you, didn't I, John?
[John:] Thanks
[Carol:] Page fourteen I think in the workbook.
[speaker001:] Indeed
[Carol:] We'll have a look through how to work those out just br, just briefly. There's a lot of erm, conflicting ideas about using Abbey's rate book and, and you might look very confusing in itself, but actually it's not half so bad as it seems.
[speaker001:] What are we doing?
[Carol:] There are certain associates, who're not going to use a rate book, there's associates who er, because you're doing a two appointment sale, will always have time to come back to the office and get a computer quote and go back with the right answer. There's other associates who like to know beforehand roughly how much they can provide for people by way of life cover and living assurance, so that they can give the people some idea, or maybe want to sit in front of them and use the rate book to give them some idea. Until you're in a situation where you've got your own lap-top computer, and you can tell them instantly. Now you don't have to rely on this, because you can ring through to head office in the evening, or you can ring through your branch while that's open, and get a computer quote over the phone, but actually find it quite useful if somebody asks me to be able to give them an idea of how much it's going to cost them. And if it's a few pence out, they're not going to worry about it, particularly if I tell them, I, I added a bit on so that I'm telling them less. Now, if we look at the first example, we've got a single male client, aged thirty four next birthday. If you look at your rate book, you'll see that the pages are determined by the ages of the clients and whether you use the front of the book or the back of the back of the book, are determined by whether he's a smoker or a non-smoker. Now this client is a non-smoker and he's thirty four next birthday, so we're using the front of the book. But we haven't got any page numbers in these new rate books,
[speaker001:] yes,... no
[Carol:] No, so we should be age thirty four, and it should have non-smoker at the top, so it's right at the front, the commonest mistake is to look up smokers in non-smokers, and non-smokers in smokers. Yes? Non-smoker that's right.... Everybody on the right page?... Now before you go racing ahead there's a couple of things that I need to tell you, so can I show you how to do the first one, and then you can race on with it. Erm, if you look at this you can see it's set out first of all in escalating premiums and level premiums, O K, that's straightforward enough. You can see that the page is entitled Covermaster for ten thousand pounds sum assured, so basically whatever figures are quoted underneath are for every ten thousand pounds of life cover available to your client, so it you want forty thousand you multiply by four etcetera. However, that isn't the end of the sum because you do have to add a policy fee, and we're not talking expense charge here, of one pound nineteen, we are talking a number which has been devised so that you get right answer from the rate book. That is all, it's got nothing to do with expenses or anything else. It's like some algebraic equations that we sometimes use. Er, if you can remember at school working out equations, as long as you filled in the, the right bits in the right place, you got the right answer. I'm afraid it's a bit like that. We're using a policy fee, now the policy fee at the moment is one pound ninety eight. However, because we're going to include waiver of premium automatically for most of our clients it's got to be the best thing, the best option, we're looking at two pounds and tuppence as a policy fee, because that's including two percent waiver of premiums. So we're looking at a policy fee of two pounds and tuppence. Now if like me, if somebody asked you how much it costs, you're going to give them an approximation, it's quite adequate to add on two pounds. The tuppence doesn't matter too much.
[speaker001:] Is that per month?
[Carol:] That's per month, yes.
[speaker001:] Per ten thousand.
[Carol:] No, not per ten thousand, per month.
[speaker001:] Just per month.
[Carol:] Per month.
[speaker001:] Per policy
[Carol:] Per policy
[speaker001:] It, it's the same fee regardless of the policy rates.
[Carol:] Absolutely, yes. So if we look now at the example we've got here. He wants a hundred thousand sum assured, escalating premium with waiver of premium on the sum assured for life. Well if we look under escalating premium and single life male, that's the first column, we come to the figure of three pound fifty five? He wants that three pound fifty five for every ten thousand, that's obviously thirty five pounds fifty, add on the policy fee, thirty seven pounds fifty. If you want to be totally accurate, thirty seven pounds fifty two. Now it may differ slightly by a penny from the computer quote anyway, so I always say, if that was me, it's going to cost you, what was it,thirt, what did it work it out,
[speaker001:] Thirty seven pounds fifty.
[Carol:] It's going to cost you under thirty eight pounds, so I've got a little bit of wei, leeway if I made a few mistakes. And when you go back with thirty seven fifty, or fifty two, he's quite happy. The selected period, O K, in this case, the selected period is fifteen years, yes? Now if we go back to the same example, the cost per every ten thousand for fifteen years is one pound fifty seven. So if he wants a hundred thousand, for every ten thousand it's one pound fifty seven, it's going to cost him fifteen pounds seventy, and add two pounds, it's seventeen seventy. It's quite simple really? O K. What do you notice about seventeen seventy though? Can we charge somebody seventeen pounds seventy for a policy?
[speaker001:] No there's a minimum premium.
[Carol:] It's below the minimum premium, so what will he have to pay?
[speaker001:] Twenty pounds
[Carol:] Twenty pounds, what will happen to the remaining two pounds thirty odd?
[speaker001:] It buys increased life cover.
[Carol:] No it buys him more units. So he's going to get the benefit of it anyway, in the cash value.
[speaker001:] That, that twenty pounds, that, that's inclusive of the two, of the policy fee?
[Carol:] That includes the policy fee. Yes? Right, can I ask you then, to do example two. We've done example one together, can I now ask you to do example two, which basically is the sum, is the same sum but the client's a smoker, so you go to the back of the book. Then example three yes, which is over the page....
[speaker001:] [whispering] []
[Carol:] Right, O K.
[speaker001:] [constant sound like hoovering in background, speech inaudible].
[Carol:] That's for one hundred thousand, that's for ten thousand, that's for ten thousand, that's right, and when we looked at the fifteen years, that's the for fifteen years, that's again for twenty five. for two hundred thousand, multiply that by the same, Have, have a, have a try on, on this one,
[speaker001:] Yes,
[Carol:] You start this example exactly the same, but Harry's a smoker, And work through as the example, O K. Have you done number three? Good,... Example three where you've got a joint life policy, the male gives you the page name, the female will give you the, because it will say joint life, and it will have the female age in groups. Mm?
[speaker001:] Say that's how
[Carol:] Joint lives, first claim, the male age will give you the page, and the female age will tell you which of those vertical column to use, where it says. The male's thirty,... so you move to thirty,
[speaker001:] this man's,
[Carol:] yes, and she's thirty two, so you go to thirty, they have joint life, so you go to thirty, that's the one to use.
[speaker001:] So you wouldn't look on the, the older
[Carol:] No, no, you look on the male age, look at the male age.
[speaker001:] Right, that's always the case?
[Carol:] That's always the case, yes, not the older, male age for page, female age for column.
[speaker001:] So that's the back of the thirty column?
[Carol:] Absolutely erm, is it escalating or level premium that they're paying.
[speaker001:] Level
[Carol:] Level, so that's right, level premiums Kim, I think it's the next section down here.
[speaker001:] It says here,
[Carol:] Yes, I think you've got it explained.
[David:] Thanks, yes, yes.
[speaker001:] ... [LAUGHTER]
[David:] The reason I put them over here, was because of the level of the sum assured
[Carol:] Right,
[David:] But er,
[Carol:] The minimum level
[speaker001:] Are we doing example four, is that alright?
[Carol:] Not at the moment because I haven't gone through how to do that.
[speaker001:] Stop showing off
[Carol:] There you are, happy, do as you're told.
[speaker001:] There he goes again....
[Carol:] yes, that's right...., three pounds eighty, that's thirty one pounds eighteen, is that, that's right, good. Fifteen years, is three pound eighty, yes, so, you, I think you must have gone down, yes you went down to the level one, yes?
[David:] The only thing that I'm not sure about,
[Carol:] Right, let's have er, er, so far, if you're a bit slower, don't worry about it, you're not going to be asked to calculate these er, in your exam tomorrow. Er, and you can spend some time looking at it in your own time, I E, going at your own pace, over the problems. Erm, example two then. The sum assured for life was how much, anybody?
[speaker001:] Example two, fifty eight, eighty two. yes, fifty eight, eight two
[Carol:] Fifty eight, eighty two,
[speaker001:] That's the premium, yes
[Carol:] Yes, that's the premium, I said the sum assured, sorry, I'm reading it off here.
[speaker001:] It's the end of the day.
[Carol:] Er, the premium, fifty eight, eighty two, the selected period, at fifteen years of premium was?
[David:] Thirty three
[speaker001:] thirty three
[Carol:] Three, thirty three
[speaker001:] Thirty two
[Carol:] Eighteen, two. Right. Example three, the cost of the sum assured of life?
[speaker001:] Eighty pounds seventy four.
[Carol:] Eighty, seventy four?
[speaker001:] yes
[Carol:] And for twenty years?
[speaker001:] Fifty five, eighty six.
[Carol:] Fifty five, eighty six. Brilliant. It's easy really, isn't it?
[speaker001:] If you get the right column.
[Carol:] [LAUGHTER] Yes, yes, [] And you're sitting there in front of a client, checking that you've got smoker and not non-smoker etcetera, etcetera. Let's look at er, example four. Let's not, let me put it easier. Erm, let's say you had a client who knew how much they could afford to spend, so what you were doing then was you'd tell them how much life cover you could afford. So let's start simply, let's say your client could actually afford forty two pounds a month. The first thing you'd have to do, is take off the policy fee. Remember the last thing you did was add it on, so if we say it's two pounds, we're back down to forty pounds that he's got to buy units. If you look at any page, you'll see the bottom part of the page will tell you how much life assurance he can get for every ten pounds he's got to spend. So if we were looking at somebody who was thirty four next birthday, and a non-smoker, which was where we started today, thirty four next birthday, non-smoker, let's have a female this time. A single female paying level premiums, she would actually get twenty four thousand, six hundred and thirty pounds life cover for every ten pounds she's got to spend. If she's got forty pounds left, she can have four times that. It's easy when the figures are easy. What are you going to then for somebody who's got thirty pounds to spend? You take off, you've got twenty two pounds, once, twenty eight pounds once you've taken off the policy fee, but you're not going to multiply it by twenty eight, you're going to multiply by, how many tens, two point eight, yes?... The last two examples, I'm actually going to ask you to do tonight rather than keep you here this evening. Example four, you notice it says how much cover would you, and that's you as an individual, knowing whether you smoke or not, obviously knowing your age, get if you spend thirty pounds a month with an escalating premium, and waiver of premium? One for life and one for a selected period. And then example five, living assurance on the same basis, but obviously you're going to get less because the risks are higher. So I would ask you tonight, if you could work out those two sums for yourself, and see how you get on with that.
[speaker001:] Are you going to?
[David:] If you want it.
[Carol:] [LAUGHTER] Erm, if somebody could spend a little bit of time with Ilias because we've got this language problem and I know that he's found this a little bit difficult, I think he would appreciate it tonight, when you get together please. I'll leave it at that, erm, rate book, it needs practice at the end of the day. Some of you will pick it up very simp, easily, others need to have a few tries at it. I was talking on Sue, I was saying if you've got a client who didn't give you the convenient forty two pounds, but said you'd got forty or thirty pounds to spend, the first thing you've got to do is take off the two pounds policy fee, so you're left in this case, with thirty eight pounds. Er, she gets that for every ten pounds she's got to spend, so you multiply it by three point eight, yes?
[Sue:] Oh, right. Yes, I get it now.
[Carol:] Right, so where are we?
[David:] Well I'm lost at the moment.
[Carol:] You've lost, I've lost you on this last one, Kim have I?
[David:] It's this last one.
[Carol:] Let me go through it again, I, I did rush through it. Can we just spare a couple of minutes so we can get this straight, because I did rush through it, and it was, er, obviously wrong of me. This time, let's have this client who's aged thirty four next birthday, erm, non-smoker, it's the page we've been using, let's say our client can afford now, forty pounds, because they're likely to talk to us in terms of tens or fives, so forty pounds. So we go to the page, thirty four next birthday,... non-smoker.
[speaker001:] Male or female?
[Carol:] We'll have a female,... and she's paying, let's say escalating premiums.... The bottom half of the page is how much she gets for every ten pounds she's got to spend, but before we find out she's got to spend, what we've got to do is take off the policy fee. So forty pounds minus the two pounds, or if you want to be totally accurate, two pounds and tuppence, policy fee,... will leave thirty seven pounds ninety eight. That's what she's got to spend to buy life assurance. The other way round, we added the policy fee in last. So it can be thirty seven ninety eight, or if you're approximating it, it can be thirty eight pounds as you wish. When you look at the rate book, a single female, escalating, with the a sum assured for life, will come to nineteen, seven two three. Is that right, somebody check that for me?
[speaker001:] Say that again.
[Carol:] Escalating, female, thirty four next birthday, with a sum assured for life, single female.
[speaker001:] Is that a non-smoker?
[Carol:] Non-smoker, yes. What's the figure?
[David:] Thirty four, seven twenty two
[speaker001:] Thirty four thousand seven hundred and twenty two.
[Carol:] Non-smoker? I'm on living assurance, I thought that was low.
[speaker001:] [LAUGHTER]
[Carol:] Sorry, I've got the wrong page.
[speaker001:] , [LAUGHTER]
[Carol:] Right, let's start again, same page, what have I got there? Thirty four, seven two, two.
[speaker001:] Yes, that's right.
[Carol:] Just testing, really, just testing. Thirty four, seven, two, two, and that's for every ten pounds she's got to spend. How much has she got to spend? She's got thirty seven pounds and ninety eight.
[speaker001:] Three point seven
[Carol:] It can be three point seven eight, seven nine eight, or you can just multiply and divide by ten for how many ten pounds there are. Which ever. You can move the decimal point, or multiply and divide by ten.... She's got thirty seven pounds ninety eight to spend, she gets that amount for every ten pounds, so you want to know how many ten pounds there are in thirty seven ninety eight, so you can write it out as a division sum or you can just move the decimal point. Which ever you're comfortable with, [clears throat], I think I'm losing my voice. Kim has that helped?
[David:] Yes, I couldn't find that figure where you were
[Carol:] Good, fine, I'm not surprised, I was looking in the wrong rate book wasn't I? So er, that's not surprising. What about Sue? Sue, alright? John, alright?
[John:] Yes, fine, no, that's fine, I just don't.
[Carol:] , yes, Ilias, I know,y, you, you're getting there aren't you?
[Ilias:] yes
[Carol:] Yes, right, I know Shirley's fine. Andrew's fine, he's packing up, he's on his way home,
[speaker001:] Why have I got page? Don't know Actually all these pages are all lose
[Carol:] Oh, do you think they're coming out, they're, they're going?
[speaker001:] It's pages thirty six to forty five, on insurance. It's thirty five Oh, we'll get the other one.
[Carol:] These are the new rate books, we've literally only had them through this week. Erm, Gerald's pointed out a problem, could you look in your living assurance rate books and see if you go from thirty six next birthday, to forty five next birthday, on the smoker section?
[speaker001:] No, Kim's, Kim's is alright.
[Carol:] Kim's is alright? Could you check whether it's just one or
[David:] Thirty six was that?
[Carol:] Thirty six, look at the thirty six year old,
[speaker001:] yes
[Carol:] And do you go straight to forty five?
[speaker001:] No, no No, I don't have that one.
[Carol:] Anybody else who's got a problem on the rate book.
[speaker001:] No, that's no problem
[Carol:] You've got twenty eight to thirty seven?
[speaker001:] You've given me Covermaster. I've got one here for ninety five, is that right? There's one at the back.
[Carol:] Let's have a look, no that one, that one is right. Have you got er, a problem?
[speaker001:] That's not right, it's on living assurance.
[Carol:] Right, hang on a second, I'll get you one when we've finished, I'll leave a cheque. O K, so far so good. So is Phil talking it through?
[speaker001:] No, it's alright.
[Carol:] You're alright, good. So, let's wrap up the day now. In your workbook,... O K?
[speaker001:] yes, I am.
[Carol:] With erm, that last bit?
[speaker001:] Well, erm, I was just trying to do it, do it, do the example four, whilst I was here, so that if I have a problem, I, I can ask about it before I go on to example five.
[Carol:] Well example four is yourself.
[speaker001:] Yes, I know
[Carol:] Which you can do tonight, we can go over it tomorrow.
[speaker001:] But it, it's the method of how you get it, that's the
[Carol:] Which is the same as, as the ones before
[speaker001:] I, I, I was just You multiply it by that. Right.
[Carol:] And you can check it tonight with any of the colleagues in the hotel to see how you're getting on.
[speaker001:] Yes, right.
[Carol:] In your workbook can I draw your attention to page seventeen.
[speaker001:] In the?
[Carol:] Workbook.
[speaker001:] I've put everything away.
[Carol:] We, we'll do it afterwards, O K, in a sec. Kim, we'll get you sorted out before you go. Covermaster, living assurance, adaptable policies, it's a summary. It's talking about a scenario John and Mary, page seventeen. I'd like to ask you to er, read it through, and the application form that Jeff gave you yesterday, yes?
[speaker001:] yes
[Carol:] I'm going to ask you to fill in that application form as regards John and Mary as your fictitious clients, all the information is on page twenty one. Page twenty one in the same book, the scenario comes first, then the information, for the application form.
[speaker001:] It's a scenario.
[Carol:] It's a scenario, yes.
[speaker001:] Oh, bang goes your beer tonight.
[Carol:] Well you didn't come up here to enjoy yourself now Philip.
[Philip:] No, I was just asking.
[Carol:] [LAUGHTER] yes, it's tonight, it's filling in the application form, but we're asking you to read the scenario so you know a little bit about the people, and then this is all the information that's been gathered. What you will have to do though, is work out the cost of the premiums, that will give you the practice with the rate books. If you have a problem, do not worry, we'll pick it up first thing tomorrow. No problem at all. But I'm sure you'll probably sort it out with your colleagues way before then.
[speaker001:] But we're not going to get tested on this?
[Carol:] You're not getting tested on working out premiums at all. No test on working out premiums. Big smile on Ilias's face. Yes.
[speaker001:] Just one, the information for the application form.
[Carol:] That's the app, the information for the application form.
[Janet:] When do we get to sleep?
[Carol:] You don't sleep, you don't sleep, Janet.
[Janet:] I suppose I'm going to do, that while I'm doing it for each course,
[Carol:] Absolutely, you could, you could actually work it all out while you're waiting for the course. So revise Covermaster and living assurance, two separate exams on the skills, complete the application form, and the rest of you will be fine. And the rest of the evening you can enjoy yourselves. Kim?
[David:] When we come to revise, it's really more appropriate that we read through these
[speaker001:] [LAUGHTER]
[Carol:] yes, they're very good, because they come, they come up with the points and the put it in the way relating to the clients, what the clients would want to know. Any questions, what the clients would want to know. Any questions
[John:] Yes, thank you.
[Carol:] A pleasant evening in the hotel, if there is a problem tonight with er,
[speaker001:] The food.
[Carol:] The food taking too long, we'll ring them up tomorrow, but historically, we've found that by tonight, they've usually sorted the problem out.
[speaker001:] I think tonight will be slower, because I mean, it's this Bird's Eye thing, and we all start
[Carol:] Oh, it's the Bird's Eye thing as well.
[speaker001:] Yes, yes.
[Carol:] Oh right, it's a shame you won't be able to go to it then. That's really sad.