Figures just released from the Investment Management Association (IMA)* show that ISA sales soared 25% in 2006/2007. But here's something to consider for your clients who are saving regularly through ISAs (or any other savings vehicle such as pension plans).
*(Source: article in ifaonline.co.uk on 1 May 2007)
What will happen to their end-goals if they need to take time off work through sickness or after an accident? Many of your clients will of course receive sick pay from their employer but this may only last a limited time.
And what about your self-employed clients? They don't have anyone else to fall back on, so putting a suitable plan in place is definitely a good idea.
So what should you do? We believe that an Income Protection Plan offers a great solution to this issue. A Standard Life plan can be set up with a deferred period to suit your client's needs. So if they get six months sick pay from their employer, you can select a 26 week deferred period. With an Income Protection Plan providing 50% of their gross income tax-free, your client may not need to cash in or suspend payment to their savings plans just to survive.
How much would that cost? Suppose your client is a male aged 40 with an income of £60,000 a year and in a managerial desk job. Setting up a Standard Life Income Protection Plan would cost £68.69* a month if the plan is to last to age 65. This produces a tax-free income stream of £30,000 a year once a claim has been accepted and the deferred period is completed.
Alternatively a plan could be set up to the end of any mortgage - suppose it finishes in 15 years time and that the monthly mortgage payment is £1,759** a month - the cost would be £30.69* per month. In both of these examples, the rates are guaranteed and include guaranteed increase options at no extra cost. So if your client increases their mortgage, they can increase their cover under the Income Protection Plan too without going through underwriting.
*Standard Life rates at 23 May 2007. Figures are for illustration only and are not guaranteed.
** Mortgage payment based on Standard Life Bank Freestyle Fixed mortgage rates as at 3 May 2007 - 5.85% for a remortgage to 24/07/09 then variable rate to expiry (currently 6.76%, 6.9% APR variable.).
Many clients will find Income Protection Plans affordable and it allows you to keep in contact with your clients and show that you are looking after all their needs - not just their investments.
No guarantees are given regarding the effectiveness of any arrangement entered into on the basis of these comments.
For full details of the contract, please refer to Your Adviser Summary to Income Protection Plan (IPP20) on adviserzone.
Links to other newsletter stories
New product launch - Welcome to business healthcare
How to give your clients what they want
Standard Life's declined Critical Illness claims drop by 11%
New ABI Critical Illness Definitions
Helping clients pick the right deferment periods
More great reasons to sell Standard Life Healthcare
Timesaving Pipeline Tracking service launched on adviserzone
• adviserzone homepage
• Techzone
• askTECH
• The Cutting Edge
• Adviser News archive
Tell us what you think of our newsletter.
Give feedback here
•click here to update
[Important Legal Notice][Cookie Policy]
Please note that adviserzone features UK and offshore products provided by Standard Life Assurance Limited and other subsidiaries of Standard Life plc. Click here for a list of product providers.
Standard Life Assurance Limited (SC286833) is registered in Scotland at Standard
Life House, 30 Lothian Road, Edinburgh EH1 2DH and is authorised and regulated
by the Financial Services Authority. 0131 225 2552. Calls may be recorded/monitored.
© 2009 Standard Life.
