Welcome back!
Scene One – Providing Entity
Hi Nick! Shaun here from Frost Financial Services, presenting to you your personalised video Statement of Advice on the XX of February 2024. My authorising licensee and contact details are on the screen now, should you wish to reach out to me at any time. Okay, lets get right into it.
Same as all scene 1
Scene Two – The Client
Nick you work full time as carpenter, married to Sarah, with 3 dependant children, living in the rural suburb of Boorolite
You would like a full review of your Life & Disability Insurance with AIA, as it has become very expensive cost $ 9,405 p.a.
Nick, you currently work full time as a carpenter. You are married to Sarah and have three dependant children and live in the rural suburb of Boorolite. You have come to me seeking a full review of your Life and Disability Insurances with AIA, as it has become very expensive, costing you $9,405 per annum in premiums.
Show Nick as a 43yo Caucasian carpenter carrying toold. Show him next to Sarah similar age, and with three young children.
Scene Three – Scope And Goals
To reduce your Life Insurance cover to $ 1,000,000
To Reduce your TPD Insurance cover to 500,000
To Reduce your Trauma cover to $ 300,000 of Trauma cover
To Reduce your Income Protection to $ 5,000 per month
To Reduce your waiting period for income protection to 90 days
Nick, we agreed that this advice will cover insurance. My focus today will be to ensure that the advice meets your goals to reduce your life cover to $1,000,000, reduce your T P D cover to $500,000, reduce your trauma cover to $300,000, and reduce your income protection insurance to $5,000 per month with a 90 day waiting period.
Scope:
Insurance
Goals:
1. Reduce life to $1M
2. Reduce TPD to $500k
3. Reduce trauma to $300k
4. Reduce IP to $5k pm, with 90 day waiting period
Scene Four – The Advice
This will save you some $ 5,826.60 p.a. including a potential Cash flow saving: $ 1,072.68 p.a. ($ 89.39 per month)
Your coverage will be far less than currently in place and you risk being underinsured - although you confirmed that these levels were adequate.
Benefits lost or gained
Any new Income Protection policies post October 2021 are inferior contracts in terms of defintions and benefits
We made you aware of the major differences via eamail and this is something you were comfortable with in order to achieve your goal of reducing premium costs.
Additional benefits
You will continue to access an OWN Occupation TPD definition and extra trauma benefits under MetLife
Implementing a 90 day waiting period for Income Protection
Whilst this provides a significant saving in premium
You will need to ensure that you have access to sufficient funds up to the 90 day threshold to cover loss of income during this period.
Like for Like Comparison
We conducted a like for like comparison with AIA, using their latest rates as MetLife have.
There was still a saving of $ 851.17, although this applies to new policies as noted, with the savings likely to be higher if we made an alteration with AIA to the current policy.
My first advice is to obtain the four insurances discussed with Metlife, for the levels of cover that you have selected. Together, the premiums will cost you $3,579, which represents an annual saving of $5,826, of which $1,073 will represent a saving directly to your cashflow.
There are a few things you need to know about this advice. Firstly, your coverage will be far less than currently in place and you risk being underinsured - although you confirmed that these levels were adequate. Secondly, any new Income Protection policies post October 2021 are inferior contracts in terms of defintions and benefits. We made you aware of these differences via email, and you were happy to accept this to keep costs low. You will continue to access an Own Occupation T P D definition and extra trauma benefits under MetLife. And lastly, while a 90-day waiting period for the income protection policy will reduce premiums signficantly, you will need to ensure that you have access to sufficient funds up to the 90 day threshold to cover loss of income during this period.
In the first screen, show four insurance shields with Metlife label on top, and the same levels of cover labelled on the bottom as listed in the goals. On the bottom, show green tick with label "$5,826pa saved ($1,073 from cashflow)".
In the second screen, show:
Red exclamation mark with label "Much less coverage, potentially underinsured"
Red exclamation mark with label "Post-October 2021 IP policies have inferior definitions and benefits"
Green tick with label "Own occupation for TPD and extra benefits for trauma
Green tick with label "90-day waiting period reduces premiums (but must retain sufficient funds)"
Scene Five – Fees And Costs
Product fees
Okay, this section is full of good news. First of all, you do not have to pay any upfront fees to us for preparing this advice for you. Secondly, as you can see on the screen, based on a like-for-like comparison of the different insurers we compared, the recommended insurer MetLife is significantly cheaper than the alternatives considered.
Nick, it is important that you understand how we get paid. Because I recommended MetLife products to you, it is MetLife who will pay us a commission. In the first year, we will receive from MetLife 66% of the annual premiums that you pay, amounting to $2,378. In all future years until you decide to cancel the MetLife products, we will continue to receive 22% of your annual premiums, amounting to $912 from year two and slowly increasing over time. These are not amounts that you will be charged out of pocket, these amounts are paid by MetLife.
Same as all Scene 5
Scene Six – Disclosures
Right, we have now finished outlining the advice and have some important informaiton to go through.
Firstly, we have provided advice based on the information provided in your fact find and your request to reduce cover levels. Secondly, this Statement of Advice is prepared for you only and therefore should not be implemented by anyone else. Next, Frost Financial Services does not have any third party interests or associations with any product providers recommended to you, and the advice is therefore not conflicted. Please note there may be a 14-day cooling off period with respect to the Metlife insurance products I have recommended, during which you may make amendments or request refunds. And finally, please note that the advice in this video is valid for a period of 30 days. If you have not confirmed acceptance within this time, we may need to revisit your circumstances.
This advice purely considers your interests only, and is therefore in your best interests. Please sign the attached A T P if you wish to proceed with my advice. Otherwise, if you have any questions, let’s discuss at our meeting. See you soon!
1. Advice based on Fact Find and instructions to request levels of cover
2. This SoA is for you only
3. No associations or conflicts
4. 14-day cooling off period
5. This advice is valid for 30 days