Protection
Statement of Advice (SoA)
Guide
as at 1October 2010
Why Protectionfirst?
Competitiveness
Protectionfirst’s Upgrade Guarantee
Commitment to be the best
Protection with MLC Limited
Life cover
Disability cover
Critical illness cover
Business cover
We recommend MLC Protection - Life
Benefits of MLC Protection Life
Extra benefits for extra protection
We recommend MLC Protection – Recovery Money.
Recovery Money features
Benefits of MLC Protection - Recovery Money
Extra benefits for Recovery Protection
We recommend MLC Protection – Flexible Recovery Money.
Flexible Recovery Money Features
Benefits of MLC Protection - Flexible Recovery Money
Extra benefits for extra recovery protection
We recommend MLC Protection – Stand Alone Recovery Money.
Benefits of MLC Protection - Stand Alone Recovery Money
Extra stand alone recovery
Income protection
Benefit offsets
Cover for medical and dental practitioners
We recommend MLC Protection – Income Excell
Benefits of Protection - Income Excell
[Note to advisers: If you are recommending they take out the extra benefits available at an additional cost, following is the wording which should be used]
Extra benefits for MLC Protection - Income Excell
[Note to advisers: if you are recommending MLC Protection - Income Protection Gold, use the following wording]
We recommend MLC Protection – Income Gold
Benefits of MLC Protection – Income Gold
Extra Benefits for MLC Protection – Income Gold
We recommend MLC Protection – Income Daily Living
Benefits of MLC Protection - Income Daily Living
[Note to advisers: If you are recommending they take out the extra benefits available at an additional cost, following is the wording which should be used]
We recommend MLC Protection – Income Business Expenses
Benefits of MLC Income Business Expenses
We recommend you hold your policy in your superannuation
Holding insurance in superannuation with Navigator
We recommend you hold your policy in your investment account
Paying insurance from your investment with Navigator
Split insurance premium across super and non-super
Why Protectionfirst?
Why we recommend Protectionfirst for life insurance
We have recently reviewed your life insurance needs, and as a result of this review we have recommended Protectionfirst based on the built in features of the product which suit your individual circumstances. Our recommendation takes into account the size and strength of MLC Limited, the insurer of Protectionfirst.
About MLC
Founded as a life insurance business for miners during the gold rush of 1887, MLC has become one of Australia’s iconic brands.
As the wealth management division of the National Australia Bank we provide investment, super, insurance and private wealth solutions to
over 1.5 million people.
We’re also proud to have been voted Australia’s Life Insurance Company of the year in 2009 for the fourth time in six years* and Australia’s number one major financial advice group** for the past two years running.
Looking after our customers’ interests and delivering value in the communities in which we operate has always been at the heart of what we
do.
* Australian and New Zealand Institute of Insurance
** CoreData, awarded to MLC/Garvan financial planning network
Competitiveness
Awards
Our analysis is supported by Protectionfirst’s recognition within the industry. Protectionfirst’smost recent awards and achievements are listed below.
February 2009:Plan for Life and AFA awarded Aviva the Platinum Award – Life Company of the Year, recognising Aviva’s excellence in service and products to financial advisers and their customers. In addition, Aviva also received a finalist award for Trauma Insurance, Income Protection Insurance and Life Cover & TPD Insurance.
April 2008: Winner of Term Life/TPD category and finalist for Income Protection and Trauma categories in the Asset Innovation Awards, run by Asset magazine published by The Australian Financial Review.
February 2008:Plan for Life and AFA Life Company of the Year awards recognised Aviva’s excellence in service and products to financial advisers and their customers. Aviva received a finalist award for Trauma/Critical Illness Insurance, Income Protection Insurance and Service Quality.
December 2007: Aviva was awarded first place in the prestigious 2007 Taylor Life Insurance Survey. Aviva’s overall first place and five star rating are based on consistent strong results across the survey’s 41 Quality Performance Functions. This result follows several years of continuous innovation in the life insurance sector from Aviva.
September 2007: An NMG survey of independent financial advisers (run by NMG Financial Services Consulting) ranked Aviva first in relationship and operational management. This includes experiences with underwriting, claims and back office administration.
January 2007: Money Magazine ranked Aviva’s Protection Income Excell the Best Income Protection Insurance (cheapest) in January 2007.
Claims History
Aviva has a strong record of claim payouts and excellent client experience.
Between 2002 and 2008, Aviva has paid a total amount of approx $381 million:
$95.5 million in critical illness claims
$17.5 million in disability claims
$126.8 million in income protection claims
$141 million in death claims
Source: Aviva claims, 2009.
Protectionfirst’sUpgrade Guarantee
[Note to advisers: If you are reviewing your client’s existing Protectionfirstinsurance and if your client’s lump sum policy (Death, Disability and Critical Illness) commenced on or after March 1995, use the following wording and/or if your client’s Income Protection and Business Expenses policy commenced on or after November 2001, use the following wording
One of the most important factors to consider when applying for insurance is the commitment from the insurer that any definitions and features are kept up to date with the latest market trends. We believe that the ProtectionfirstUpgrade Guarantee is of significant value. It works on the basis that should MLC Limtedimprove the benefits and features under its current insurance offering at any time, where such improvements result in no increase in premium rates, MLC Limitedwill automatically apply the benefit improvements to all existing policies.
It should also be noted that at no point in time can you be disadvantaged in any way as a result of any change to the benefits and features to your existing policy provisions.
Commitment to be the best
MLC Limitedhas indicated to advisers that they are committed to offering competitive insurance. MLC Limited upgrades their product definitions and features at least twice a year. This keeps them at the forefront of the life insurers in the Australian market amongst other insurance providers.
Protection with MLC Limited
Life insurance for lump sum benefits varies from company to company. In making this recommendation we have evaluated the term life insurance products from insurers across Australia to compare the benefits and flexibility of MLC Limiteddefinitions compared to other life insurance companies. We have used the latest industry research to evaluate the costs and the features of the products in our recommendation.
We believe theProtectionfirst product range has some unique features compared to other life insurers.
Life cover
Life cover offers a lump sum payout upon your death during the term of your policy.
We recommend Protectionfirst’sLife cover for a number of reasons:
In some instances, Protectionfirst’scover can pay out if you are diagnosed with a terminal illness, and have less than 12 months to live. Protectionfirsthas strong claims history and proven experience in this area.
Clients gain automatic benefit improvements through the life of their policy as part of Protectionfirst’sUpgrade Guarantee.
Protectionfirst allows you to bundle life, critical illness and total and permanent disability (TPD). Itallows you to split the ownership of polices between individual(s) and superannuation fund.
Protectionfirstprovides you with insurance cover whilst your application is considered. This is known as their Interim Cover which offers immediate protection in the event you die or suffer a critical injury (depending on the cover applied for). Cover takes effect upon MLC Limitedreceiving a completed Interim Cover Certificate. This can be prior to MLC Limited receiving the full application and is valid for 10 days. In addition, once the application has been received the Interim Cover is valid for up to another 90 days while the application is being assessed.
Greater protection is available for your business by way of increasing your death and disability sum insured and/or critical illness sum insured once in each policy year, without having to provide further medical evidence. This facility is known as the Business Protection Option.
Disability cover
Disability cover provides a lump sum payout if you become Totally and Permanently Disabled (TPD).
[Note to advisers: Choose appropriate recommendation]:
We recommend the ‘any occupation’ test of Total and Permanent Disability (adviser to insert justification for recommendation).
OR
We recommend the ‘own occupation’ test of Total and Permanent Disability (adviser to insert justification for recommendation).
OR
We recommend the ‘TPD Activities of Daily Living’ test of Total and Permanent Disability (adviser to insert justification for recommendation).
We recommend Protectionfirst’sdisability cover for a number of reasons:
If you become Totally and Permanently Disabled, Protectionfirsthas a three month waiting period. This means if you are unable to work because you are disabled MLC Limitedwill seek to assess you in just three months. (Some insurers won’t assess you until six months).
Protectionfirst also has the flexibility to provide up to $5 million of TPD cover, this is a market leading amount with the excess over $3 million based upon a revised definition, according to the terms and conditions of the policy. Similar to Protectionfirst’scritical illness cover, TPD cover can continue up to age 90, according to the terms and conditions of the policy.
We recommend the Activities of Daily Living Benefit as this will provide up to $3 million of cover should you become so disabled that you cannot perform activities of daily living, according to the terms and conditions of the policy.
Critical illness cover
Critical illness cover pays a lump sum if you are diagnosed with one of the critical illnesses covered by the policy. It typically covers a range of illnesses such as heart attack, coronary artery disease, stroke and cancer.
We recommend Protectionfirst’scritical illness cover for a number of reasons:
It provides a lump sum benefit on the occurrence of any one of 37 specified critical illnesses up to $2 million and can continue up to age 90, according to the terms and conditions of the policy.
There is the additional benefit of having a terminal illness and funeral assistance benefit payable if you have life cover with critical illness cover.
The cover gives you the option, at an additional cost, to insure against13 specified severe illnesses which allows for payment of up to 10% of your critical illness sum insured on diagnosis.
The cover gives you the option, at an additional cost, to insure up to five children or grandchildren to a maximum of $200,000 against death and critical illness, according to the terms and conditions of the policy.
Where your critical illness cover is $100,000 or greater the policy provides free cover of $10,000 for all your dependant children between the ages of 3 and 18 next birthday.
For the payment of an additional premium, you have the ability to purchase a Life Policy after a critical illness or disability claim has been made and without providing further medical evidence.
Cover for medical and dental practitioners
Occupationally Acquired Hepatitis B, C and HIV Infection
[Note to advisers: If you are recommending term insurance, the benefits to medical and dental practitioners are as follows:]
We recommend Protectionfirstterm insurance for the following reason:
Not all life insurers will cover you when it comes to occupationally acquired Hepatitis B, C and HIV infection. Protectionfirst can provide cover for medical and dental professionals up to $500,000 for Hepatitis B and C. This is in addition to any other critical illness cover, which may include occupationally acquired HIV infection.
TPD benefit for specialist surgeons
We recommend you pay the optional additional cost to be covered for Total and Permanent Disability (TPD) with the ‘own occupation’ definition.
[Note to advisers: If you are recommending income protection, the benefits to medical and dental practitioners are as follows:]
Income protection benefits for health professionals
We recommend Protectionfirst’sIncome Protection Gold policy for the following reasons:
MLC Limited will pay the monthly benefit for six months (even if you are still working), if you are diagnosed with occupationally acquired Hepatitis B or C or HIV infection. This is standard with MLC Protection - Income Protection Gold policies and is at no additional cost.
Protectionfirstincome protection policies recognise that:
Contracting blood borne diseases may not render the health care professional as physically incapable of undertaking the important duties of their occupation.
Restrictions may be imposed by a relevant practice board or other regulatory body due to you acquiring such a disease.
Where you are unable to undertake an important income producing duty of your regular occupation because of those restrictions, you are unable to do so because of injury or sickness.
Business cover
Protectionfirst’sBusiness Protection Option allows you to increase your benefits without providing further medical evidence. This can be used to reflect a change in the value of your business, key person valuation or increased debt.
Protectionfirst’s Business Protection option can be used for protection of your insurance needs for:
business succession planning
loan guarantor cover
key person cover
[Note to advisers: Choose the appropriate wording for your client]
We recommend Protectionfirst’sBusiness Protection option as it will enable you to apply for an increase in your death and (if applicable) disability Sum Insured and/or critical illness Sum Insured. This can be applied for once in each policy year, without having to supply further medical evidence.
[Note to advisers: choose the relevant option for your client and cut and paste the appropriate wording]
For your business succession planning purposes, we recommend you be protected for up to three times your original Sum Insured. This option will provide protection of up to $15 million or three times the amount of your original Sum Insured, whichever is less.
For your loan guarantor needs, you can be protected up to three times the original Sum Insured when this benefit is first purchased or $5 million, whichever is less, as the demonstrated value of the business increases, without having to supply medical evidence.
For your key person insurance needs, you could be protected up to three times the original Sum Insured when this benefit is first purchased or $5 million, whichever is less, as the demonstrated value of the business increases, without having to supply medical evidence.
TPD up to $5 million, subject to the terms and conditions of the policy.
Business partner discount of 5% for all lump sum policies.
We recommend MLCProtection - Life
MLCProtection – Life provides a lump sum benefit if you lose your life or become terminally ill. If you die during the term of the policy, you or your beneficiaries will receive a pre-determined lump sum.
Benefits of MLCProtection Life
The standard benefits offered by this policy are:
You can choose to receive an advance payment of your entire death benefit if you are diagnosed with a terminal illness and likely to die within 12 months, subject to the terms and conditions of the policy, providing financial support for your family.
Automatic annual increases in your cover in line with inflation, based upon a maximum initial amount for death and TPD cover of $3 million.
Automatic renewal of your policy until it expires (providing you continue to pay premiums).
[Note to advisers: If you are recommending this product pick and choose the features which are relevant for your client]
Flexibility to increase cover when significant events happen eg marriage, birth or legal adoption of a child, first home, child starts secondary school, increased annual salary by at least 10%, divorce.
Flexibility to freeze your premiums anytime after your 30th birthday.
Flexibility to pay your premiums from your superannuation contributions which may allow you to save on tax.
Receive up to $10,000 as an advance payment to meet your funeral costs.
Interim Cover offers protection for events that causes death, critical injury or disability while your application is being completed. We recommend you complete the Interim Cover Certificate for immediate protection for up to 10 days. In addition once the application has been received the Interim Cover is valid up to another 90 days while the application is being completed.
The policy provides 24 hour worldwide cover.
One of the most important factors to consider when applying for insurance is the commitment from the insurer that any definitions and features are kept up to date with the latest market trends. We believe that Protectionfirst’sUpgrade Guarantee is of significant value. It works on the basis that should Aviva improve the benefits features under its current insurance offering at any time, where such improvements result in no increase in premium rates, MLC Limitedwill automatically apply the benefit improvements to all existing policies.
It should also be noted that at no point in time can you be disadvantaged in any way as a result of any change to the benefits to your existing policy provisions.
Extra benefits for extra protection
[Note to advisers: if you are recommending your client chooses extra benefits use the relevant wording, as follows]
Based on your situation, we recommend you add the following optional benefits to your policy, for an additional cost:
Lump sum benefit if you become Totally and Permanently Disabled.
Premium waiver if you become Totally Disabled for an extended period, or become Retrenched.
Accidental Death Benefit.
Increase death and (if applicable) disability cover and/or critical illness cover, yearly to reflect your revised business value (known as the ‘Business Protection Option’).