NB the sections in BLUE type relate specifically to REBROKED cases –
they’re highlighted in blue to make them easier to delete for those cases which are not rebrokes.
Name
Address
Address
Address
Address
Date
Dear Name
Following our recent discussions and completion of a Personal Financial Planning Profile on date, I am writing to detail the recommendations which I feel are appropriate to your current circumstances.
My recommendation takes into account that you are single / married / separated / divorced, with no / one/ two / three / four dependent children. It also takes into account that you are self-employed / employed and a lower / basic / higher rate taxpayer, currently earning £_____ gross per month. Taking into account your income and expenditure you anticipate that your monthly disposable income is approximately £Amount.
You were concerned that if you were sick and unable to work for an extended period of time, you would not have sufficient income to meet your outgoings and liabilities. I therefore recommended that you should begin contributing to a Permanent Health Insurance (PHI) Plan with a selected tax free benefit level of £Amount per month. You felt that this amount would be sufficient to cover your needs. After the chosen deferred period it would be payable upon acceptance of your claim and payments would continue until you return to work, your normal retirement date or death, whichever is the earlier occurrence.
If the case is a rebroke, include a paragraph with details of the existing policy/policies and an explanation why it/they are being replaced - often for cost reasons but not exclusively e.g.;-
I confirmed that, due to the continuing change in mortality rates, it is now possible to obtain higher levels of cover for the same monthly premium that you are currently paying toCompany, over a slightly longer remaining term……………….The remaining term on your existing policy no longer meets your needs…………………..Your present policy contains reviewable premiums / is shortly due for review / has been reviewed and you would prefer a “guaranteed” policy whereby the premiums are not subject to reviews. ……..……….The lives assured on the policy no longer match your requirements.
I would suggest a deferred period of Number of weeks with claim benefits being payable to age NRD. This is in keeping with your stated income, existing provisions and deferred period requirements. I have pointed out that this type of policy has no cash in value at any time and is a pure income protection policy.
In the event of a claim you will need to prove that you have received sufficient income in the form of a salary and/or dividends. If your income at the time of claim is lower than that as stated on the application form, there is a risk of the benefit payment being reduced or not paying.
The total sum of the monthly premiums payable over the life of the policy is £XYZ (representing £AB per month x12 months x 5 / 10 / 15 / 20 / 25 years). Do note however that you are able to cancel the cover provided by the policy at any time should you choose, and future premiums will cease.
Your contracthas reviewable premiums and / or includes the benefit of increasing / indexed cover, which means that over the years the monthly premiums and thus the total premiums payable will increase, but at this stage it is not possible to predict what the final total may be.
We considered a guaranteed premium policy where the premium rate is fixed for the life of the contract (although indexation increases may apply) but you felt that a reviewable premium was more in keeping with your requirements in keeping the costs to a minimum.
I would recommend Product Provider as the selected provider on the basis that they have competitive premiums and are a well-respected provider of Permanent Health Insurance with a good claims record. They will allow you to index your premium, benefit and claim by Percentage% per annum / the RetailPrices Index / the National Average Earnings Index and this will therefore help you protect your benefits against the effects of inflation.
You require the benefit to be provided on a cost-effective basis and the Product Provider premium of £Amount per month is well within your budget guidelines.
We have also discussed the Key features document which outlines the type of benefits payable and when these benefits will be paid. The commission payable by Product Provider is shown on your personalised illustration. You should read these documents carefully and contact me if you have any queries concerning them. I would like to draw your particular attention to the sections on charges and cancellation.
If the case is a rebroke, include the following paragraph;-
It is important to note that, at this stage, we are merely applying for your replacement policy to be underwritten to ensure that Product Providerconfirms the terms of cover for you. In this respect, you should not cancel payments to your existing plan until I have advised you of product Provider’s acceptance of terms.
If the client has not signed a proposal or input form, include a hard copy of the electronic data input, with the following sentence;-
I also enclose a copy of the information supplied to the insurer based on the details you gave me. It is essential the particulars are correct as they form the basis of the contract, therefore please check the form carefully and advise me as soon as possible of any discrepancies. Please note it is important that the insurer is advised if any changes occur before the policy commences.
I hope that the contents of this letter accurately reflect the details of our discussions and would therefore be grateful if you could sign and return a copy of this letter in the enclosed pre-paid envelope.
Yours sincerely
Adviser’s Name
Title
Signed:
Client’s Name