As an example, Frank is 45 and has an 18-year-old son. Frank has a small CBIL of £250k and he takes out a Life and CIC policy for himself. By ticking a box, Frank’s CIC includes Critical Illness for his son with no underwriting.
When Frank’s son reaches 21, he is no longer eligible for children’s CIC but what Frank’s son can do is take over the critical illness policy in his own name, for a term of his choice, with no underwriting and at non-smoker rates, even if he smokes.
As an adviser, you have got a six month window from when the son turns 21 to effect this, so it does need diarising. Therefore, Frank receives a premium reduction on his Life and CIC policy (paid for by the business), his son has CIC, and as an adviser, you have potentially secured a client for in two to three years’ time. A recent study from Prudential UK called Family Wealth Unlocked revealed that two-thirds (67 per cent) of people whose parents have a financial adviser also use the same adviser.
The need for financial protection has never been greater and the market has never been more dynamic or proactive following the pandemic. As Churchill said, “never let a good crisis go to waste”.
Christina Melling is head of propositions at a financial advice firm
