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Why it’s so important to seek specialist advice when arranging high-net-worth life insurance

Published On: 27 June 2022
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For most people, life insurance is an important part of protecting their family and other dependents. For a high-net-worth (HNW) individual with major financial commitments, obtaining the appropriate level of cover is even more vital.

Read on to learn about the challenges of securing appropriate life insurance for clients, why the traditional approach doesn’t always work, and discover a personal and efficient way for your clients to get the cover they need.

The challenge of securing high-net-worth life insurance

For HNW individuals, it can be difficult to secure appropriate financial protection. The level of cover they might require alone can exclude them from many insurance providers.

Sometimes, your client might have very specific requirements in terms of the cover which fall outside a standard insurer’s “tick box” approach. Or perhaps they need a significant level of cover confirmed within a tight time frame?

These factors mean that approaching a regular financial adviser or planner can often lead to an unsuitable outcome for a HNW individual. Instead, speaking to an expert can offer real value.

The traditional approach of securing life insurance

The life insurance application process can be long and time-consuming.

Firstly, your client may be asked to complete a cumbersome application form. Once they have completed this and their adviser has put together the proposal, they’ll often wait while an insurer requests medical reports and arranges for their medical examination.

Your client’s application may also simply be too complex or bespoke for an insurer to consider – meaning they could waste considerable time.

Even if the insurer offers terms, it could take months.

There’s one important additional factor. If your client fills in and submits an application and an insurer declines the application, this will have to go on record. This could make it much harder to secure the cover they need or make it more expensive, as they’ll have to declare this on any subsequent applications.

Luckily, there is a better way for HNW individuals to obtain the protection they need.

A more personal and efficient approach to HNW life insurance

If you have clients with complex life insurance needs, specialist advice is crucial. At John Lamb Hill Oldridge we take a fundamentally different approach that speeds up the application process and can help to secure competitive terms for the life insurance your clients need.

One key benefit we offer is that we have our own in-house underwriter. He is familiar with the requirements of insurers, their premiums, and the loadings they are likely to impose upon a client’s insurance policy.

So, for example, as we know which insurers are likely to offer terms based on a client’s specific circumstances, we can help to avoid a “decline” outcome.

Our life insurance process will involve the following steps:

  • To kick-start the process, we will have a short initial conversation with your client – and their other advisers if applicable – and agree the shape of their requirements and desired level of cover.
  • Our underwriter will sensitively ask about lifestyle, medical history, travel habits, and hobbies. All of this is discussed and recorded before any medical. By gathering this information, we can manage a client’s expectations around likely terms.
  • Significantly, we can establish whether an application is likely to be declined for cover. As we do this ahead of submitting a proposal, it won’t need to be declared on future applications.
  • We request GP medical records – often from both NHS and private practices – and we will arrange the medical and collate all the medical information.
  • In addition to collating all the supporting information, we will support and manage the application process for the client.

We know how to package and present all the appropriate lifestyle and medical information to the insurer. By managing the application, we can speed up the process, ensure we speak to the right insurer, and even negotiate any premium loading.

Additionally, we take care of the financial underwriting and agree terms with the insurer before submitting the application. We also carry out checks on all trustees (who will often be our client rather than the policyholder).

How our approach helped a HNW client recently

Our 60-year-old client was referred to us looking for life insurance cover of more than £20 million. We were instructed in late February and, because of the client’s overall tax planning strategy, he needed to have cover in place by the end of the tax year.

The client spends a lot of time out of the country. So we had to coordinate the completion of a medical, get the results back, submit the application to the insurers and arrange for the cover to go into force, all within a couple of weeks.

To make things more challenging, the client wasn’t a standard risk. During the initial conversation, our underwriter predicted a loading on the policy, which turned out to be almost exactly correct.

Along the way, the client’s GP informed us that they’d lost several years of medical records. We chased these and insisted the surgery keep searching until the notes were found. When they were eventually located, one of our advisers drove to the GP surgery to collect them personally.

As the client wanted such a high level of cover, we had to split the application for reinsurance purposes. This subsequently resulted in a further “split” of cover to satisfy the reassurers involved.

Get in touch

If you have clients who would benefit from specialist advice or you are interested in how you can work more closely with us, please email [email protected] or call us on 020 7633 2222.

Please note

Life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

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