Why sell protection? David Pope Channel Development Director Legal & General

2 Why sell protection? The protection market Reasons to sell protection Selling protection Proof it is worth selling

The market

4 The protection market - 5 year product performance Total new individual Term Assurance sales ,136,738 1,541,930 Total new Critical Illness Cover sales ,066,262536,143 Total new Whole of Life sales , ,362 Total new Income Protection sales , ,780 Source: Swiss Re Term & Health Watch 2008

5 The protection ‘gap’ Clients Lack of awareness Cost Lack of trust The protection market - declining sales Advisers Focus on mortgages Product knowledge Clients

6 The protection market - providers

7 + Source: Swiss Re Term & Health Watch 2008 Life Assurance protection gap (trillion pounds) Life Assurance protection gap, , measured by sums assured The protection gap is £2.3 trillion. The protection market - your opportunity What could your income share of this £2.3 trillion be?

8 The market - your clients 83% 75% Females Males 50% of adults have insufficient or no life cover Source: Swiss Re - Term and Health Watch 2007 Source: Legal & General Value of a Mum 2006

Reasons to sell protection

10 Some sobering thoughts… Today in the UK: Source: National Statistics, 2007 and Department for Work & Pensions, million people are claiming income support Protection – some sobering thoughts…….. Over 2.5 million people of working age will be off work for at least 6 months at any one time through sickness and disability Over 2.6 million people are claiming incapacity benefit Almost 3 million people are claiming disability living allowance Over 1,380 people will die

11 The importance of protection MortgageExpensesChild careSavingsPensionLuxuries Regular income

12 The importance of protection MortgageExpensesChild careSavingsPensionLuxuries Mortgage protection

13 The importance of protection MortgageExpensesChild careSavingsPensionLuxuries Mortgage protection Protection

14 The importance of protection If you only protect the mortgage you are only hitting 20% of the opportunity It’s the Adviser’s job to make the customer aware of what protection they should have and provide recommendations based on their needs Full protection can help protect 100% of the opportunity

Selling Protection

16 Selling protection – underpinning financial planning

17 Selling protection – identifying opportunities The traditional client – an example

18 Customer lifestyles are changingSelling protection – identifying opportunities The contemporary client lifestyle

19 Selling protection - loan arranger or an adviser…? People want to buy houses People need mortgages Mortgages are sourced and arranged People need protection People rarely want to buy protection Protection needs to be sold

20 Selling protection– three big mistakes 1.No attempt made to sell 2.Thinking you’ll come across as pushy 3.Selling attempted in an unconvincing manner

21 Selling protection - overcoming challenges Remember…. u tilise the product and sales support and training offered by providers Present the facts Demonstrate there is a need Build a client and adviser relationship Attempt to ‘put yourself in their shoes’ Not seen as a worthwhile purchase Uncomfortable with the sale Affordability Client concerns not understood

22 Selling protection – support sales aids Contact our protection sales team for more information on

Proof it is worth selling!

24 The proof - for your clients Death claims Critical illness claims YearAmount paid % of claims paid 2007£179 million96.3% 2006£165 million96.6% 2005£163.8 million96.4% YearAmount paid % of claims paid 2007£110.1 million88.2% 2006£92.1 million83.3% 2005£83 million79.4% Source: Legal & General Focusing on Family Protection, 2008

25 ProductTime Taken Average Gross Earning £s Per Hr £124, Mortgage 3 hrs£486.48£ £124, Joint Life + CIC 1hr£ The proof - your commission potential Your commission Source: Legal & General Mortgage Protection – The Value of an Hour, 2008

26 The earnings potential Two life sales plus one life + CIC sale plus one family plan per week = £ commission* £141, pa* Two life sales plus one life + CIC sale per week = £2, commission* £113, pa* Three life sales per week = £ commission* £48, pa* vBased on commission figure of £500 per mortgage sale. (commission varies dependant on house price) *All figures based on a 35 yr old male non smoker, £200k sum assured, over 25yrs (Quote date 20/08/2008). FPIP benefit of £2,822 per month. All quotes based on 140% lautro including 10% eUplift And all that calculated over 48 weeks….leaving you time to spend it!

27 Conclusion The protection gap Do your clients need it? Opportunities Is it worth it?

28 Please come and visit us at our stand