Presentation on theme: "Dying too soon Preparing your clients for the unthinkable Robin Carr Head of Adviser Development."— Presentation transcript:
Dying too soon Preparing your clients for the unthinkable Robin Carr Head of Adviser Development
Problems on death What they have to face Funeral arrangements. Bureaucracy –Register the death –HMRC –National Insurance –DVLA, Passport Office –Bank –Insurance, mortgage and pension providers –Employer –Solicitor
Problems on death What they may have to face Delays in winding up the estate Intestacy issues Inheritance tax Possibly no immediate access to funds Inability to meet day-to-day bills Losing the house or having to move Living on state benefits.
Problems on death What they may have to face State support for widows/widowers 1 –Tax-free bereavement payment of £2,000 –Bereavement allowance of between £33.36 a week and £111.20 a week (depending on age) for 52 weeks –Widowed parent allowance is a maximum of £111.20 a week payable while receiving child benefit Pensions Act 2014 proposes changes - many widows/widowers with children will be worse off 2 Unmarried couples? Sources: 1. Benefits & Credits, gov.uk, August 2014. 2. Childhood Bereavement Network, July 2014.
Protection is the answer But is it enough? The job of the protection adviser: Establish the protection needs Establish a reasonable budget Create a tailored solution Treat the customer fairly.
Holistic protection advice Wills – a closer look If you’ve sold your clients a life policy, can you: Guarantee the proceeds won’t end up in the estate of the deceased? Guarantee that the deceased will have a will when they die?
Wills – a closer look Intestacy Do your clients understand what happens to their life cover if it’s subject to intestacy? Do you understand the intestacy rules?
Place the policy in trust 3 very good reasons Trusts can Help protect your clients’ life cover from –Intestacy problems –Probate delay –Paying too much inheritance tax Provide control for funds to be managed for young children.
Right time Probate delay
Questions you might get asked Yes £250,000 I don’t know! Are we covered? How much for? When can I have it?
Right money Inheritance tax – possible implications… More than 5,200 people left their families with an IHT bill on their life insurance pay-out in the 2011/12 tax year, up by around 5% in 2 years. Healthinsurancedaily.com, 27 August 2014. The average bill on their life insurance pay-out was £41,000.
Choice of trustee Who will the client trust? Criteria to consider (other than legal ones) –The client should trust them –Are they financially aware? –Maybe similar age to the client? –Do they have a similar income? –Do they have children themselves? –Are they local? Could they (or people like them) also be guardians?
Guardianship The issues Remarkable survival of siblings, 4 and 19, who escaped fire that killed their mother and brother... Dad killed himself in Morocco 3 days after wife died on holiday... Miracle survivor: Baby left an orphan when family died in Mecca crash is back home... Little boy orphaned as parents die in freak lorry accident at low bridge... Dailymail.co.uk, 1 June 2012. Themirror.co.uk, 19 February 2013. Thesun.co.uk, 27 February 2013. Themirror.co.uk, 10 February 2011.
Guardianship A closer look Can you guarantee that your clients won’t die together (or soon after each other)? What would happen to the children if both parents die? Do you understand how guardians are appointed? What could happen if the mother dies and the parents weren’t married?
Guardianship Unmarried couples
Holistic protection advice The benefits for you… Showing that you’re treating your customers fairly Establishing your credentials as a protection adviser Ring-fencing your advice and encouraging business to stay on the books Creating long-term protection clients Creating opportunities to generate new business.
Preparing your clients for the unthinkable Summary Your business plan Have a look at our Good Parent Portfolio pack and trust toolkit Technical support available: brightadviser.co.uk/gpp
Handset question Would you like to hear more about our Good Parent Portfolio?