1. Parental protection

2. Holistic protection advice Needs Budget Review Value of Advice Treating the customer fairly

3. Learning objectives Constructing a protection portfolio for a modern family Interaction of mortgage, personal and business needs Importance of trusts

4. Agenda “A modern family” Client scenario Additional needs Calculating covers required Financial planning outcome

5. Agenda “A modern family” Client scenario Additional needs Calculating covers required Financial planning outcome

6. A modern family’s protection needs

8. A modern family's relationship 42% Current divorce rate in UK 118,140 Divorces 50% In first 10 yrs 45 m 42 f Average age 48% 1 child < 16 yrs Source: http://www.ons.gov.uk/ons/search/index.html?newquery=divorce Apr 2014http://www.ons.gov.uk/ons/search/index.html?newquery=divorce

10. A modern family’s business Source: www.ons.gov.uk/ons/rel/regional-trends/area-based-analysis/births-and-deaths-of-enterprises-in-local-enterprise- partnerships--2004-11/sty-business-enterprise-closure-rates.html

11. http://www.ons.gov.uk/ons/rel/regional-trends/area-based-analysis/births-and- deaths-of-enterprises-in-local-enterprise-partnerships--2004-11/sty-business- enterprise-closure-rates.html

12. FOS-protecting a modern family’s needs 906 critical illness complaints 1439 income protection Source: Annual Review of customer complaints – Financial Year 2013 / 2014 Pages 47 / 48 Financial Ombudsman Service Limited, May 2014

13. Annual Review of customer complaints – Financial Year 2013 / 2014 Pages 47 / 48 Financial Ombudsman Service Limited, May 2014

14. Agenda “A modern family” Client scenario Calculating covers required Additional needs Financial planning outcome

15. Client scenario The name: MED.net is used here as a purely fictional UK based company as part of a case study example. It is not to be confused with any other company, organisation or legal entity.

16. Mortgage protection cover of say life, critical illness, income protection etc-but do they have any other needs? Immediate protection needs

17. Agenda “A modern family” Client scenario Additional needs Calculating covers required Financial planning outcome

18. Fact find qualification QualifyImpact Family protection:- (i) Covers required/existing (ii) Married/common law relationship? (iii) Previous relationships? (i) Implement/complement (ii) Not married/no wills...direction of benefits, potential IHT & guardianship (iii) Paul has a son, James, & pays maintenance Employee benefits:- Paul has none & Linda has someFactor Linda’s into the protection portfolio Paul’s business:- (i)There is a loan for £60,000 (ii)Is there shareholder protection? (iii)Any development plans? (i)Personal g/tee secured on his house (ii)No cover-continuity of business & fair value to his dependants (iii)No plans to sell or buy out-so annually review Health status?Impact on protection terms, but both are fully fit.

19. Agenda “A modern family” Client scenario Additional needs Calculating covers required Financial planning outcome

20. Qualify target sums for all the required areas Review existing plans & employee benefits...fit for purpose? Net off as appropriate Resulting covers required Subject to Paul & Linda’s budget and priorities Calculating covers required

21. Budget planner

22. Mortgage protection options Paul & Linda’s mortgage requirements Structure optionsRationale £160,000 22 years repayment mortgage Life &/or CIC Joint or single life Ideally inclusion of both. Joint life-cheaper, simple-default. Single-more costly but increased cover and more flexible.

23. Family protection Insuring PaulStructure optionsRationale Replacement of Paul’s income for Linda and family, plus, son from previous relationship. No employee benefits Life or Life and CIC?. Lump sum or FIB? Written under trust? Income protection Include both if budget permits FIB logical, simple clean, tax free income. (i) Linda and children Yes written under flexible trust. (ii)Son from previous relationship Yes written under fixed trust Income protection- yes..executive...group... individual

24. Family protection Insuring LindaStructure optionsRationale Replacement of Linda’s income for Paul & the boys. Employee benefits:- (i)2 times DIS (ii) 1 years CIC (iii)group income protection Life or Life & CIC Lump sum or FIB Written under trust? Income protection Include both if budget permits FIB logical, simple clean, tax free income (deduct £28,000 DIS?) FIB life written under flexible trust(split version if CIC included) to aid any future adjustments as may be required, Income protection-cover under the group scheme negates the need for cover.

25. What is a trust? A trust is a way of holding property for the benefit of another without giving them full and immediate control over it Life Policy Who is to benefit? Who is to look after the trust? Rules and regulations

26. MED.net business protection Paul’s needsStructure optionsRationale Business loan protection Life of another (Mednet on both directors) Business continuity & remove exposure to personal estate Shareholder protection Both shareholders on own life under trust with double option agreements. Continuity of ownership for surviving shareholder, and recompense to Linda for commercial value of Paul’s holding.

27. Agenda “A modern family” Client scenario Additional needs Calculating covers required Financial planning outcome

28. Mortgage Protection - repayment of mortgage Personal protection - continuity of income Personal protection - continuity of income for son from previous marriage Business protection Removal of potential claim on family home Sole control for surviving shareholder/fair value for share of business. Financial planning outcome

29. Learning objectives Constructing a protection portfolio for a modern family Interaction of mortgage, personal and business needs Importance of trusts

30. “Knowledge is of no value unless you put it into practice.” Anton Chekhov Thank you for your time

31. Question 1: What is the main type of protection business you are engaged in? (i) Family & mortgage (ii) Business (iii) IHT (iv) All of the above Handset questions

32. Question 2: Would you like a Friends Life Account Manager to contact you regarding the support available? (i) Yes (ii) No Handset questions

33. Question 3 – Please rate the: Quality of presentation 1-9 Handset questions

34. Question 4 – Please rate the: Value to your business 1-9 Handset questions