12 PROTECTION TOMORROW
Gary Harrison , Senior Business Development Manager with SimplyBiz Mortgages and Steve Howard , Head of Mortgage and Lending Intermediaries Compliance Services , recently debated the evergreen and perennial topic of decreasing term vs level term and joint vs single life advice .
The decreasing vs level term and joint vs single life advice conundrum
Gary Harrison
Senior Business Development Manger
SimplyBiz Mortgages
Steve Howard
Head of Mortgage & Lending Intermediaries Compliance Services
SimplyBiz
While it could be argued there are technically no right or wrong answers here , their recent Protection Matters session set out to tackle some of the commonly asked questions , and define the important considerations that would lead to clients receiving the advice that best meets their needs and objectives .
As we know , all life insurance policies are not created equal , as each has its own individual benefits and quirks . The qualities they clearly share are the ability to protect individuals , partners and families alike when potentially life-changing scenarios occur , through lump sum and regular payments . However , when you are considering the intrinsic financial benefits of a decreasing benefit plan over level term and vice versa , there should be some very important discussions that come into play in order to place your client in an informed position before making that all-important advice recommendation .
The same could be said for joint life vs single life , where with the benefit of foresight and a good crystal ball , the decision here would be easily based on life events , but who can legislate for what happens in the future ? In addition , while two single policies can sometimes be more expensive than combined cover , it isn ’ t always the case , and the benefit could be that with two single life policies , should partners pass away together , there would be two payouts to the beneficiaries . With joint cover , there is the tricky situation of what happens when the couple divorce , for example .
Gary and Steve discussed expectations , best practice and regulatory obligation , to see whether they could get to the bottom of these complex conundrums on your behalf – or at least give you some food for thought .
Let ’ s clarify exactly what we mean when we talk about a decreasing vs level term consideration
Term life assurance is the most common and affordable form of life insurance protection in the UK , typically coming in either a level or decreasing term format in order to protect your client ’ s family or mortgage . Selection of the best term policy option will depend upon your client ’ s specific needs and objectives , which you will discuss in the fact-finding process , and this should revolve around what they consider to be important protection considerations .