C1 Market factors

Low frequency plus low impact is

Infrequent minor injury like cutting finger

High frequency plus high impact is

Periods of unemployment

low frequency plus high impact is

Premature death or serious illness

Protection is one of the few areas where

Commission can still be charged

Alternatives to buying through advice are

Buying direct from provider or using new online, non-advised channels

Cost of living crisis caused a decline in

Non-advised channels sales

A disadvantage of non-advised channels is

Responsibility is on the consumer who may not know necessary info to choose correct product

Some direct-to-consumer providers offer

A service where customers can ask for advice through a seperate specialist adviser

The protection gap formula is

Resources needed - cover in place through individual policies and through employer sponsored group life cover

If cost of mortality cover falls

The amount of cover purchased increases significantly

One of the major changes in protection product design came from

Segmentation of vital health determinants - key issues that affect mortality

The preferred life policy is

Giving cheaper premiums to ultra fit people, reversing the underwriting process and instead setting fitness goals

The preferred life policy can cause

Complex market pricing, as different offices can offer different versions of what’s preferred to be competitive

Developments of preferred life policy can cause

Market distortions - it will become difficult to get basic indication of likely cost of cover and choose best deal

Underwriting has become more stringent because

Of the increase in different groups they insure for competitive premium rates, which may cause higher number of cases declined

The signposting agreement means participants must

Signpost consumers they can’t serve to specialists who can help them

Market price has been pressured by

Online portals that show comparative rates, as most won’t look past the first page for a commodity purchase like term assurance

Sales of protection products are more likely to be achieved when

There is face-to-face interaction with an adviser

Problems of buying without advice meaning quick completion includes

• Heavy upfront marketing costs

• Simple online process hard to achieve with compliance and underwriting issues

• Clients buying wrong type or level of cover, then cancelling when reviewing expenditure leading to low persistency