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AXA Protection Account Business Protection
AXA Business Protection
Business Protection Underwriting
This presentation
is directedisatwritten
professional
advisers only
and should
be distributed
to orthis
relied
uponcustomers.
by retail customers.
This presentation
for youfinancial
as a professional
financial
adviser.not
Please
do not show
to your
AXA Protection Account Business Protection
Business Protection Underwriting
Topics to cover…
1.
2.
3.
4.
5.
6.
7.
8.
AXA Underwriting Philosophy
Underwriting Options
Non Medical limits
Tele-underwriting
Underwriting Support
What is Financial Underwriting
Types of Financial Evidence
What we need
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Our philosophy
We aim to offer the best possible terms available to each
customer and our approach is inclusive not exclusive
We aim to do this quickly and efficiently and without
collecting extensive medical evidence.
To achieve this our Underwriters use
their years of skills and experience
to assess cases.
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Where we excel…
Competitive Underwriting Decisions on:
Applicants with high Body Mass Index (BMI)
Applicants who Smoke
Mild Asthmatics
Mild Depression
Service Delivery
Large Cases
Tele-underwriting
Minimum additional evidence to assess risk
Underwriting Availability (Telephone and Email)
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Options
Paper Applications
Electronic Applications
(online & e-Connected)
Traditional
Underwriting
Point of Sale
Underwriting
Tele-underwriting
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Options
Point of Sale Underwriting
By submitting business electronically with our online Point of
Sale system or e-Connected CD-ROM you can take
advantage of Electronic Underwriting
Benefits:
Dynamic questions
Intuitive software
Faster processing
Higher acceptance rates
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Life – Medical Limits
Radical revision of automatic medical evidence limits launched
in November 2007
Abolished use of automatic General Practitioner’s report (GPR)
for under 45’s if the sum assured < £1,000,000
Where we do require auto evidence on the under 45s we will
use Nurse Screenings rather than GPRs.
Why? Little point in getting GPR on young clean lives also
average turn around return on Screenings is 16 days while
average turn around on GP reports is 27 days.
To compensate for these higher GPR and medical limits the
requirement for blood testing has been lowered from £3.5m to
£1.5m.
Removed requirement for Resting ECGs for Life.
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
New Non Medical Limits
When is a GPR required?
When is a Medical needed?
Life
Life
Age (NB)
AXA
L&G
NU
Age (NB)
AXA
L&G
NU
Under 30
£1,500,001
£600,001
£750,001
Under 30
£1,500,001
£1,000,001
£1,000,001
31-35
£1,500,001
£600,001
£750,001
31-35
£1,500,001
£1,000,001
£1,000,001
36-40
£1,500,001
£400,001
£600,001
36-40
£1,500,001
£1,000,001
£1,000,001
41-45
£1,000,000
£350,001
£500,001
41-45
£1,000,001
£750,001
£750,001
46-50
£300,000
£300,001
£400,001
46-50
£1,000,001
£750,001
£750,001
51-55
£100,000
£200,001
£200,001
51-55
£1,000,001
£500,001
£500,001
56-60
£100,000
£150,001
£150,001
56-60
£1,000,001
£350,001
£350,001
61-65
£35,000
£75,001
£75,001
61-65
£500,001
£200,001
£200,001
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Critical Illness – Medical Limits
Radical revision of automatic medical evidence limits
Abolished use of automatic GPR for under 45’s if the
sum assured < £1,000,000.
Where we do require evidence on the under 45s we will
use instead Nurse Screenings rather than GPRs.
Why? Little point in getting GPR on young clean lives
also average turn around return on Screenings is 16 days
while average turn around on GP reports is 27 days.
Addition of more focused age banding introducing 5 year
age bands in the 40s & 50s age groups.
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
New Non Medical Limits
When is a GPR required?
When is a Medical needed?
Life
Life
Age (NB)
AXA
L&G
NU
Age (NB)
AXA
L&G
NU
Under 30
£1,000,001
£400,001
£400,001
Under 30
£750,001
£750,001
N.O.
31-35
£1,000,001
£300,001
£350,001
31-35
£600,001
£750,001
N.O.
36-40
£1,000,001
£250,001
£300,001
36-40
£600,001
£750,001
N.O.
41-45
£1,000,001
£200,001
£200,001
41-45
£500,001
£400,001
N.O.
46-50
£250,001
£125,001
£150,001
46-50
£500,001
£400,001
N.O.
51-55
£100,000
£75,001
£100,001
51-55
£400,001
£200,001
N.O.
56-60
£75,001
£75,001
£100,001
56-60
£350,001
£150,001
£250,001
61-65
£0
£0
£50,001
61-65
£300,001
£50,001
£150,001
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
What is Tele-underwriting
Big T:
• Capture application details
over the phone
• Recorded phone call
• Can be scripted/use data
capture with nurses or U/W
• Immediate acceptance
Little T:
• Use phone to capture
additional/missing
information
• Recorded phone call
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Our Tele-underwriting model
Step 1
Short app completed
(paper/electronic)
Step 4
Acceptance/Referral
Step 2
Customer contacted
Step 3
Customer interview
using AURA
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Tele-underwriting statistics
Immediate acceptance:
25%
Acceptance without the need for further evidence:
75-80%
Underwriting decisions:
80% ordinary rates
Decline:
Less than 2% of customers
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Tele-underwriting statistics
Increased disclosure and quality of disclosure:
Recreational drug abuse
Alcohol
Smoking
Back problems
Mental health
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Tele-underwriting statistics
In the UK:
Industry declines 25% of all CI claims*
Nearly half of this is due to non disclosure**
*Source: Swiss Re Term and Health Watch – 2007
**Source: Swiss Re Claims Watch - 2007
Current non disclosure rate at claims stage
for Tele-underwriting at AXA is 0%
Market Leading
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Tele-underwriting – customer benefits
Relevant questions
Less embarrassment
Less time in sales process
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Tele-underwriting – your benefits
Can concentrate on sales
Reduction in paperwork
Disclosure risk passed to AXA
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Dedicated underwriting support
Pre-application enquiry – Medical and financial
requirements.
Ring fenced service – Key contacts (case ownership)
Introductory call to IFA with underwriting requirements
and manage expectations
Proactive pipeline management – Regular progress
updates
Call to IFA with final decision
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
What is financial underwriting?
Definition:
Assessing whether the individual applicant can justify
the proposed sum assured
Objective of Financial Underwriting:
Establish Insurable Interest
Reasonable contract for cover required
Reasonable Sum Assured/Term
Most importantly ‘ does the case make sense’
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Live Cover - financial limits
Business Cover
Business Financial Questionnaire
£1,000,001
Reports & Accounts
£5,000,001
Copy of Loan Offer for Loan Protection
£2,000,001
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Critical Illness Cover - financial limits
Business Cover
Business Financial Questionnaire
Reports & Accounts
Copy of Loan Offer for Loan Protection
£500,001
£1,000,001
£750,001
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Types of financial evidence
There are various avenues in which a case can be financially
assessed and these include:
Financial Questionnaire
3 years audited company accounts
Copy of loan agreement
Business projections/plans
CV’s
Independent valuations
Existing Cover/Jumbo Limits
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Types of cover
We offer a range of Business Protection covers including:
Key Person Protection – Protects against the loss of an employee who
makes a significant contribution to business success.
Partner / Director Share Protection - Provides funds for the
remaining owners to buy the shares of a deceased partner or
shareholder.
Business Loan Protection – Can help protect business loans. Most
businesses need to obtain finance as and when it’s required. If anything
happened to jeopardize a company’s existing loans or its ability to
secure new funds, it could seriously effect profitability and growth.
Executive Income Protection – It protects them against loss of
income. The cover is more comprehensive than individual income
protection.
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Key Person Protection
Purpose:
Offset the financial loss following the death or long term
disability of a key individual
Financial loss may be influenced by:
A fall in profitability
Withdrawal of investment Monies
The added cost of Recruiting/Training a replacement
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Underwriting Key Person Protection
The 2 most common ways that this can be calculated are:
Multiple of salary calculation
Loss of profit calculation
For Life Cover:
Either
Salary × maximum of 10
5 x average net profit (3 years)
For Critical Illness Cover:
Or
Salary × between 5-7
2 x average gross profit (3 years)
Important:
The amount offered must be attributable to the individual
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Partner/Director Share Protection
Purpose:
Enables Partners to purchase deceased share of
business without compromising the deceased
dependents
Basis of policy:
Single life policies on own life should be effected:
Policy should be written in Trust , Double or single option
agreement
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Underwriting Share Protection
The method we use to value the company is:
Quoted Companies:
No. of shares x quoted
price = level of cover
Copies of company accounts
can be obtained from Companies
House for as little as £1
www.companieshouse.gov.uk/
Unquoted Companies:
Net asset value +
(multiple of net profit) =
level of cover
The company’s accountant can
supply an estimate of company’s
value. This is relatively simple for
tangible assets, more difficult for
intangible assets such as goodwill
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Business Loan Protection
Purpose:
Effected to provide protection in connection with a loan in
event of a Key Person’s death
Underwriting:
Generally a copy of the loan offer/agreement will suffice
Cover must not exceed amount of loan or term of loan
Other considerations:
Lenders reputation
Additional evidence may be required
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Executive Income Protection
Purpose:
To provide a regular monthly benefit to support a
covered employee who is unable to work due to
illness or injury
Pension and National
Underwriting:
Insurance Contributions
Benefit will be 75% of persons earnings
of £2,500 per month can
be included on top.
Maximum benefit is £11,000 per month
Evidence required:
Business Protection Questionnaire,P60’s, 3 months
payslips, reports and accounts
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Underwriting Key Person Protection - Case study…
Your client is Male, 48 years old, a managing director of Sapphire
Group limited.
The business supplies chemicals to the brewery and catering
industries. Have been in business for 4 years. His remuneration
for the last 3 years has been £55k, £59k and £59k.
Business accounts reveal this picture:
Turnover
Gross Profit
Net Profit
2004
£3.4 million
£1.3 million
£328,000
2005
£3.4 million
£1.2 million
-£21,000 (loss)
2006
£3.3 million
£1.3 million
£490,000
The company has applied for £1 million key person cover on the life of the sales director the company estimates he contributes 33% to company profits’. He is also a major
shareholder of the company.
The purpose of the cover is to cover the potential loss in profits.
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Underwriting Key Person Protection - Case study…
Questions…
1. Can you calculate the key person sum assured?
2. Who will own the policy? And why?
3. Who will pay the premiums?
4. What criteria would the business have to satisfy to obtain tax relief on
contributions? Explain?
5. Assuming the business cannot claim tax relief on the contributions, what will
happen to the sum assured, should a claim arise.
6. What advice would you give regarding how the benefits might be treated by
HMRC
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Underwriting Share Protection - Case study…
Your client is Male, 48 years old, a managing director of Sapphire
Group limited.
The company supply chemicals to the brewery and catering
industries. Have been in business for 4 years ago and employs
33 staff, has a 49% shareholding in the business. His business
partner has a 51% share in the business.
Business accounts reveal this picture:
Turnover
Gross Profit
Net Profit
2004
£3.4 million
£1.3 million
£328,000
2005
£3.4 million
£1.2 million
-£21,000 (loss)
2006
£3.3 million
£1.3 million
£490,000
The directors have valued the company at £2.8 million
Accounts received confirming figures from FQ and also that the net asset value of
company was £500k.
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Underwriting Share Protection - Case study…
Questions…
1.
Can you calculate the sums assured required for shareholder protection for the two
directors?
2.
What is the most flexible way in which shareholder protection can be arranged and
why?
3.
What should you check to ensure the shareholder arrangement is suitable for the
business?
4.
What additional documentation will be required to go with the trust forms?
5.
Who pays the premiums? What are the tax implications?
6.
What does ‘adjustment of premiums’ mean for the shareholders?
7.
What happens after a claim has been made to the shares?
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.
AXA Protection Account Business Protection
Business Protection Underwriting
Questions and further information…
Any Questions?
For further
information
Read our:
• AXA Protection Account - Business
Protection Guide
• Quick Reference FAQ
Or visit
• www.axa.co.uk/advisers/protection
This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers.