THE LIFE INSURANCE MARKET
Predicting the future is notoriously difficult. This is why successful and wise individuals buy life insurance.
Pricing life insurance is both an art and a science, where changes in lifestyle and health constantly influence our life expectancy. Consequently, insurance companies often make different assessments of the same individual based on their own specific underwriting philosophies and processes. This translates into different premiums for the same risk.
At lower sums assured, the impact of these differences may not be material. However, for policies with sums assured in excess of £1 million, the impact can amount to thousands of pounds per year in extra premiums.
Life insurance brokers should negotiate with a variety of insurers to secure the best terms for their client.
THE STANDARD APPROACH
Process repeated if terms are not optimal
The standard approach will be to apply to one insurer who will underwrite the Client. If the required outcome is not achieved the process will be repeated. This involves a long and frustrating journey, potentially requiring several medicals and multiple application forms. As a result of this inefficient process, fewer than one in two applications with sums assured exceeding £1 million are successful.
WHY RISK ASSURED IS DIFFERENT
Risk Assured reverse engineers the standard approach. By collating all the medical and financial information in-house we can broker and establish terms before applications are made. We retain leading industry underwriters in-house who collate and analyse the data, package it intelligently for insurers and reinsurers, and then negotiate terms across the entire insurance market.
Risk Assured offers a superior client experience:
▪ Optimal terms and best premium achieved with minimal client involvement.
▪ A single medical examination, undertaken at the client’s convenience.
▪ Significantly reduced timeframes.
Each client embarks on a bespoke journey, depending on their circumstances. Our aim is to make the process as simple as possible while securing the best terms.
1. Underwriting assessment
To place cover successfully we need to determine the level of underwriting required, be it medical, financial or lifestyle related. To do so, we take each client through a simple engagement pack. Completion of the engagement pack does not place any obligation on a client.
2. Medical underwriting
We will usually require a medical examination and/or doctor’s report. All medical examinations are organised at reputable facilities, and at a time and place of the client’s choosing. We can provide a summary of the main findings where requested.
3. Financial underwriting
We may also require financial information such as Inheritance Tax computations or details on outstanding mortgages / property debt. We often work with a client’s other professional advisers to obtain such information.
Once all the relevant underwriting information has been gathered, we access the entire market to source the policy or policies that offer the best terms. We negotiate on the client’s behalf with insurers and reinsurers, especially when we need to question decisions.
5. Final terms and application
Final terms and premiums are sent to the client for approval before proceeding. Once approved, we pre- complete the insurer’s application form, and the details therein are subsequently confirmed with the client.
The policy is placed ‘on risk’ and so deemed to be active. All relevant policy documentation will be sent to the client including a suitability report that details our discussions and recommendations.
7. Writing in to Trust
Where appropriate, and working alongside other professional advisers, we ensure that the policy is either written in or assigned in to trust to maximise tax efficiency.