The big C

Dominic Thomas
June 2023  •  10 min read

The big C

If you have a television, it’s likely that at some point you will have watched an episode of ‘A Place in the Sun’ or the BBC’s ‘Escape to the Country’.  You know the format – a 30-minute programme that would take 10 minutes to watch if it wasn’t for the constant of reminder of what you have just watched. I never really understand why despite each property being unknown, one is specifically described as a mystery house. These are popular shows (to put it mildly). We Brits are obsessed with house ownership and most of us hold onto a fantasy that ‘somewhere else’ is probably a better place to live.

I learned recently that one of the presenters of ‘A Place in the Sun’, Jonnie Irwin, who turns 50 this autumn, was diagnosed with terminal lung cancer in 2020.  He has talked publicly about his illness and recently appeared on a podcast for insurance company AIG. Sadly, he does not have critical illness cover and is now on a mission to encourage people to get some. He believes it would help if advisers could ‘humanise’ the insurance, sharing stories about how it works and what their experience has been.

I think he has a point, and certainly in his professional life, he is adept at helping people imagine a better future for themselves. However, imagining a bleak future is obviously uncomfortable, something most of us try not to do preferring to leave this to dystopian books, films, TV shows and music. We simply prefer to ignore or deny uncomfortable truths, thinking “it will never happen to me”.

I’m 54.  I don’t know if it’s unusual, but I have already lost many friends my own age to cancer. I’m guessing you know at least one person that has too.  I have critical illness cover; I provide it for the team here as a standard benefit. It’s not cheap and frankly, I hope it’s a waste of money, because if it isn’t, then there has been a major, unwanted life event.

Over the last three decades, I have had to deal with various claims against cover that I arranged for clients. Not all of them died, some have recovered very well and whilst not forgetting the experience, it isn’t top of mind.

Given my background and when I started in financial services, selling products was what I was trained to do.  Rightly or wrongly, I have been somewhat reluctant to use sales ideas that make people feel uncomfortable within my own business. I often haven’t shared the details of fairly harrowing stories of things that might prompt you taking out more cover (or some). I hate being manipulated and I struggle with the tension of using a true story that is designed to encourage you to get more insurance (even if we do remove commission). For that, I apologise. I have a drawer full of stories and with permission, I will share a few, not with the intention of getting a sale (we don’t even arrange protection policies these days – we refer you to a specialist broker); but to ensure you give this proper consideration.

I hope that Jonnie and his family find the miracle they seek.

If you would like to talk about financial protection, please get in touch.  If you already know what you want and need, then head over to our professional connections page and give Cura a call or email.

The big C2023-12-01T12:12:32+00:00

Life assurance – not all it seems

Dominic Thomas
Dec 2022  •  11 min read

When life assurance is not all it seems

Life assurance is one of the few solutions to the question ”how can I help?” when posed to a family that has just experienced permanent, life-changing loss.  Over the three decades that I have been advising clients, this is, without doubt, one of the most challenging.

Most of us live as though we have an abundant supply of tomorrow. Rarely does anyone really wake and decide that life assurance (or any financial protection) is the major task to get done today.

Death is of course a subject that literature and our culture regularly address, yet in those intimate spaces of our lives, it’s a topic rarely discussed, perhaps one of the last taboos. This was never more starkly revealed to me when (many years ago) someone told me not to talk of death and Wills because he believed that it would make it a reality. Naturally he never became a client (I only work with mortals).

LIFE ASSURANCE – BAD SISTERS

I was intrigued by a series on Apple TV called ‘Bad Sisters’.  I enjoyed the series, but wanted to address the premise of the drama – which confused me initially. I will not ruin the story at all by simply saying that a claim against a life assurance policy is being challenged by the adviser, which in my world does not reflect the truth.

A WASTE OF MONEY?

Advisers arrange financial protection (life assurance, critical illness cover and income protection). These are all policies that everyone takes out hoping to never have to claim on them, because to do so means something awful has happened to you. We all actually want the cover to be a ‘waste’ of your money… though using as little of it as possible to secure the right, most appropriate balance of cover.

MAKING A CLAIM

In the event of a claim, it is the insurer that assesses the legitimacy of a claim against the policy terms. In the case of life assurance, it is fairly evident if a claim is valid (the assured has died). In more nuanced cover (income protection and critical illness), the assured is alive and unwell, the question is therefore “is the condition being suffered covered?”. In both circumstances fraud is not uncommon, though I would suggest it is pretty rare and most claims are paid out fairly swiftly and appropriately. An oversimplified for instance, is that a broken arm is not grounds for a claim for a critical illness or inability to work long term, the loss of an arm, however may be grounds, particularly if you are a surgeon.

BROKER BEWARE…

The series, whilst set in Ireland and therefore not regulated by the FCA, has the insurance broker Claffin & Sons investigate a claim for life assurance. Whether in Ireland or here in the UK, this is an alarm bell for authenticity. The small family run insurance broker is reluctantly run by son Thomas Claffin after his father committed suicide. Early on it is evident that all is not well, a database of no policies and concern about the collapse of the business. This is not how things work, unless fraud is being committed.

I can assure you that in the event of a claim, I and probably any adviser will be eager to get you funds from the insurance claim as this is probably the most obviously meaningful aspect of our work, protecting you and your family when disaster strikes, providing funds to make the financial pain disappear.  Advisers will certainly want to ensure that a claim for the more complex cover is worth claiming for (broken arm example), but will then seek to hassle the insurer for agreement and payment of funds to you the claimant. Some insurers are better than others in terms of efficiency, but we have never had a valid claim refused.

Claffin didn’t arrange cover, they simply committed fraud, taking and living off the premiums and hoping that their clients didn’t make a claim. That is fraud (honestly I am not spoiling the excellent series and plot).

A PAPER TRAIL WELL DOCUMENTED

You will have a policy document with an insurer and be paying monthly premiums or in some circumstances, annually. These will show on your bank statement and are not paid to the adviser or broker. Even with all the mergers and subsequent name changes for the insurance company you are paying, you will receive a plethora of correspondence, the main challenge being to keep up to speed of who say Commerical Union, Clerical Medical, Friends Provident, Skandia (and so on) now are. You have a unique policy number. If in any doubt get in touch. If you are unsure if you have enough financial protection or perhaps too much now, please ask.

As for the series by Sharon Horgan, I thoroughly enjoyed it. My purpose here is not to suggest otherwise, merely to explain how an insurance claim would work in practice. Here is the trailer for the series, with a cast that includes….

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Life assurance – not all it seems2023-12-01T12:12:41+00:00

EXISTING CUSTOMERS ARE “FLEECED”

TODAY’S BLOG

EXISTING CUSTOMER PENALTY

If you have ever found yourself screaming at the radio or television as an advert comes on about your existing insurer, finally it seems, your exasperation has been heard. Yes you were right, new customers were getting a better deal than you (on your home and car insurance). Perhaps on your banking or mortgage too.. but let’s park that for another time.

The Financial Conduct Authority (FCA) is bringing an end to the practice of car and home insurers charging loyal customers more than new customers. ‘Price walking’ – commonly known as the ‘loyalty penalty’ – is a pricing practice where existing customers are increasingly charged more, the longer they stay with the same insurer. If you have been a client for a while, you will have heard me mention “the inertia that financial services companies rely upon”. I normally make this comment in relation to someone that has not reviewed their pension or investments for a while, or taken an annuity from their pension company (now that doesnt happen as much these days).

Following a consultation launched in September 2020, the FCA has confirmed this unfair practice will be banned from 1 January 2022 –  saving customers an estimated £4.2bn over 10 years. So, if you are a tad cynical like me, then we can look forward to adverts towards Christmas time that focus on the last hurrah of rip-off insurers…. of course I’d also suggest that we may all end up paying more.

Has your insurer offered a better deal?

NEW CUSTOMER DEALS FOR ALL…

Insurers will have to offer existing customers wanting to renew, a price that is no higher than they would pay as a new customer coming through the same ‘sales channel’. The ‘sales channel’ is just how you reached your insurer, which could be through their website, over the phone, through a comparison site or via a broker. These can all have an effect on the premium you pay and will continue to do so. So, for example, if you’re renewing over the phone, you’ll be offered the same price as a new customer switching to that insurer by phone.

There is of course a but… But this might be a higher premium than a new (or existing) customer taking out a policy online. If you really have the time to call a massive insurance company on the phone, they are likely to charge you more for the pure joy of the experience. As well as the new rules on pricing practices for home and motor insurance, the FCA is also bringing in new rules to make it easier to cancel the automatic renewal of their policy, which should make it easier to shop around. The pricing and auto-renewal changes will come into effect on 1 January 2022.

WANT MY ADVICE?

Well, do not waste your time with comparison websites. These are not whole of market and cheap is not necessarily best. This is insurance. You do not want it, but you need it and if you need to make a claim, you will want it paid out. So, use an insurance broker. Yes they will not be the cheapest option, but their real-life experience is…. priceless. They will get the most suitable arrangement from the market. If you do not have a broker, I can recommend one, who I have used for years – Richard Hiscox at 1StopInsurance. Put his details in your addressbook now or just call or email him to let him know your renewal dates.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

EXISTING CUSTOMERS ARE “FLEECED”2023-12-01T12:13:02+00:00

Laptops on Planes…

Today’s post is from Richard Hiscox of Onestop Insurance. Whilst technology makes online comparison of most things fairly easy, when it comes to insurance I am a great believer in people with experience, who have real-life experience of claims, which is the only real test of whether your insurance is value for money or not . Richard has been my insurance broker for over 20 years and I am delighted that he has agreed to share some of his thoughts here. Just to be crytal clear, as with all posts within the blog, there is no financial exchange.

Laptops on Planes

You will no doubt have heard about certain flights into the UK and USA banning things like laptops from hand luggage, insisting that they are carried in hold luggage instead. So where do you stand with regards to insurance of these items?

Whilst I cannot speak for all insurers the following will normally be true. You may want to check it out before you travel with your travel providers just to be clear though. Your options are:-

  • Rely on the airline to cover your goods.
  • Trust your travel insurance policy to deliver.
  • Cover items under your home insurance policy.

Airlines usually settle claims for lost or damaged baggage based on the weight of the baggage NOT the true value of the contents. If you rely on this method to be reimbursed you could be seriously out of pocket so this is not the choice we would suggest.

Travel Insurance

Laptops are normally classified as “valuables” and as such under a travel insurance policy therefore afforded quite limited cover, especially when placed in the hold of an aircraft. Normally valuables are not covered within the hold of an aircraft and if lost or damaged would have to be part of a claim against the airline who in turn could limit the amount they pay out as already stated.

Home Insurance

This is normally the best way to insure high value items such as laptops when travelling by aircraft. The items should be covered as “all risks” or “personal possessions” but precise details of this cover need to be checked to ensure any claims will be problem free. Either speak to your insurers or give Richard a call at 1 Stop Insurance.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Laptops on Planes…2023-12-01T12:18:28+00:00

Anything to declare?

Anything to declare?

Having made your way through airport lounges, delays, immigration and luggage collection, the last airport encounter will be customs. Greeted by green signs asking if you have anything to declare. I tend to find myself wishing to say something funny, but am well aware that airports are not places for humour.

Customs generally operates on the basis of trust –  trusting you to tell the truth, failure to be truthful may be discovered, resulting in considerable discomfort, embarassment and possible shame, for those of us that still feel such things.

Declaration forms

Most people don’t like forms, fewer still like insurance forms. Some appear to take the view that full disclosure is optional, it isn’t. At best this is memory failure, more likely selective memory, at worst simple deception.

Full Disclosure

Admittedly insurance forms are tedious, but it is better to complete them fully – too fully, so that you disclose all of the information required. This is particularly important in relation to tax and health, as well as the more obvious identity and residency. I have not had the misfortune of any client misleading an insurer (or anyone else) however it is important to remind everyone that misleading information invariably comes back to haunt.

Lessons from Glasgow

I’m thinking of the very sad tale of the lorry driver in Glasgow, who had a blackout whilst at the wheel of a refuse lorry during a busy morning of Christmas shopping. It would appear that similar blackouts occurred before, yet were not disclosed in subsequent encounters with those charged with assessing the health and fitness of the workforce. Many may have taken a similar approach, thinking that the incidents were “in the past” and “no longer relevant”. Sadly this was a hugely costly misjudgment.

I imagine that the driver feels terrible about the accident and utterly devastated by the assertion that perhaps if he had recorded and presented information differently, his life and those lost and those families and friends effected by this terrible accident would now be rather different. In such situations, it is tempting to simply seek to blame someone, yet perhaps we could all benefit from being reminded that full disclosure is important, questions on forms are invariably posed for good reasons, (yes I know that many may not be) but honesty is there to protect us all.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Anything to declare?2023-12-01T12:20:03+00:00

Do You Need Financial Protection?

Solomons-financial-advisor-wimbledon-bloggerDo You Need Financial Protection?

A question I’m often asked is do I need financial protection? frankly this is rarely the question… most people are really asking if insurance is worthwhile. Given the scandal of PPI, and a general mistrust of financial services, it is little wonder. Add in the reality that there is a general assumption that such contracts are designed to favour the insurer and the lawyer involved, many question whether the insurers would ever pay out.LifeHappens

OK, there is little I am going to be able to say to convince anyone that is suspicious about “the system”. All I can do is point you to data about claims paid and also relate my own experience. In all the years I have been advising clients, I have unfortunately had a number of claims. All of them were accepted, only one was not paid out at the full amount (they paid 73% citing non-disclosure of material health matters). We are currently considering whether to contest this or not, I can see both sides of the argument – but obviously represent my client, so will represent his interests.

In essence there are really only three types of financial protection I deal with for individuals. So let’s cover what these are.

1. Life assurance – you die, it pays out. Price is everything, there is pretty much nothing between providers on terms and conditions, however there are a myriad of types of life assurance policy and enormous differences in cost.

2. Critical Illness Cover – this is much more contentious. Terms and conditions are everything, quality is upmost, price is secondary – you pay for what you get. However cost still varies enormously. This cover pays out if you are diagnosed with a serious medical condition – it pays you. The main conditions are cancer, heart attack and stroke….all stuff that most of us would prefer not to think about, but probably know several people (depending on your age) that have experienced this.

3. Income Protection – this  pays your income if you cannot work due to incapacity and an inability to return to work. Generally cover would pay until you are better and can return to work, or until the policy maturity date (invariably your retirement date). It isn’t so contentious, these days a lot of employers provide cover. Certainly terms are important – most basic being does it pay out if you cannot do your job or any job or any job for which you are suitably skilled/able.  Cover is always less than your total income, as this provides an incentive for the claimant to “make a recovery” and also reduces fraud. Cost varies considerably. Generally cover is a percentage of income, up to a maximum and starts typically after 3, 6 or 12 months of “being unwell”… the longer this “deferred” period, the cheaper the cover. This isn’t accurate… but gives you an idea.

Which job would you prefer?

Job A: £60,000 per annum

Job B: £59,500 per annum plus £38,675 per annum until 65 if you have a long term illness.

As I say, its not accurate, lots of if’s but’s and maybe’s…. but hopefully I am conveying the concept.

So how much cover do you need?

That depends entirely on your circumstances, the cost of your lifestyle, your age and your level of debt and if you have anyone that is relying on you. It is generally true that the more you need cover, the less you can afford it… think of a young family who have a tight budget…precisely because they have a tight budget they need cover. Some people don’t need any cover (because they have ample resources). In essence they are self-insuring, however some of these people would prefer to pay for insurance so that they pass the risk to the insurer rather than bear it themselves, so using funds for other, more enjoyable purposes.

Reviewing Cover

So you have a load of old policies. You have some cover. Sometimes it isn’t a good idea to change the cover –  the policies where terms and conditions matter generally are weaker and more vague these days than they once were. However some can be reviewed. Don’t forget on the whole your debt should be reducing and you and your family, if you have one are older, less dependent.

FT FAAwards2015

Financial Times (FT) Financial Adviser Awards 2015

Yesterday I attended the FT Financial Adviser Awards – having been nominated for “Protection Adviser of the Year”. I’m pleased to say that it was a podium finish (2nd)… which isn’t bad (the winner is a thoroughly good adviser that I respect – genuine congratulations). Of course I would have preferred to win – but hey, out of 24,000 advisers in the UK… I, like Nico Rosberg need to keep improving. However I don’t really know the exact reason why I came second (unlike F1 there isn’t a final lap chequered flag. I assume it cannot be based on the amount of protection business I arranged over the last year (consider the big networks of advisers or Bank employees), so I presume it is the quality of the advice process, perhaps also because I have always removed commission from protection policies (reducing the cost for clients) which is still unusual and not a regulatory requirement of “adviser charging rules”. Perhaps it was the case study, business model or interview that revealed the quality rather than the quantity of our protection advice. At this stage I don’t know, but what I do know is that if you find yourself in a nightmare scenario – the inability to earn, or life threatening illness or worse – suddenly bereaved, having cover in place that removes financial stress makes all the difference in the world. Because sometimes in life stuff happens that we don’t like.

Dominic Thomas

 

Do You Need Financial Protection?2023-12-01T12:40:06+00:00

G-Day – nothing to do with Australians

G-Day Something Down Under?

G-Day has nothing to do with Australians, but one might chuckle that it has something to do with down under. G-Day is actually Gender Change Day… yes you did read that correctly (no I didn’t – its actually Gender Directive). Before you start shouting at your computer that you’ve just about had enough of excuses for more greetings cards, this is in fact a European… no, not yet…directive (hold on) that makes it illegal for insurers to discriminate between male and female. In other words men and women must be charged on the same basis – much like this week’s news that equal pay for equal work, except of course that when it comes to insurance, there is nothing so unfair as equality. Eh? What I mean is that women live longer (sweeping generalism, but generally true) so they get cheaper life assurance. Now they won’t.  It also applies to car insurance and annuities, in fact any insurance.

Brussels for Christmas?

So in the interests of showing what this may mean (because the truth is that we don’t actually know yet…. remember I am something of a truth fan, despite the cost). Anyway a fairly major insurer emailed me yesterday (Liverpool Victoria – credit where it is due). G-Day is set for 21 December 2012 (21/12/2012)… methinks that the Brussels powers like amusing numbers. Anyway the table below is LV’s attempt to outline their take on potential changes.

Product type

Currently, on average…

                      Potential impact of Gender and I minus E changes**

 

                              Male Female

Income Protection

Women pay 65% more than men                           +20% -28%

Critical Illness (with Life)

Men pay 10% more than women*                            +6% +16%

Term

Men pay 10% more than women                            +3% +22%

Underwritten Whole of Life

Men pay 20% more than women                             -5% +15%

As all tables come with a caveat or two…..”There are so many factors affecting premiums that it is impossible to give a single definitive figure that will apply to everyone. The extent of change will vary by provider, will differ by product class and be determined by the individual circumstances of the client. Added to this, we expect to witness a fair amount of re-pricing activity in early 2013 as providers attempt to get to grips with the new gender neutral world.”

More Unintended Consequences

You will quickly gather, that women will be paying more for most insurance. I’m going to stick my neck out and guess that this probably was not the Eurocrats intention. What it does mean is that you will probably need to review your protection arrangements if you are a woman with income protection. Admittedly this is one insurers take on life, but LV are generally pretty competitive. They also have a dedicated website called “no more guesswork“.

Early Christmas for commission hungry insurance salespeople? surely not!

I may have bored you senseless about the new adviser charging regime starting on 1st January 2012. Ironically this does not apply to insurance, so I’m guessing that commission based advisers will be fairly eager to get people to switch their cover (generating new commission) so be warned. There will will be some advisers (like ourselves) who simply charge a fee for the work and remove the commission entirely. I write this as yet another email arrives telling me that a very well known company can offer me even more commission with their new charging structures (note it wasn’t LV).

 

G-Day – nothing to do with Australians2023-12-01T12:23:06+00:00
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