The Protection Adviser Autumn 2025 | Page 22

Value-for-money Though getting life cover at the lowest possible premium is often the driving force for most customers, you should spend time explaining the flexibility and insurability this option provides your customers in the future. As this option is an enhanced customer benefit, the premiums will be slightly higher, but it’ s a relatively inexpensive way to ensure customers can maintain life cover after their term policy expires. It can also be used as an alternative to higher WOL premiums, especially during the current climate, and may be the difference between them affording / having cover now and not. Here is an indication of comparative monthly premiums:

Age Level Term cost CT cost WOL cost 30 £ 17.28pm £ 20.82pm £ 152.30pm 40 £ 30.38pm £ 37.08pm £ 200.64pm 50 £ 69.70pm £ 85.82pm £ 258.22pm

Zurich quotes 04 / 03 / 2025, M / F non-smokers, joint life first death, £ 200,000 cover, 40 / 30 / 20-year terms to age 70 and WOL.

On full conversion to WOL at age 65 on a JLSE basis, would( on current rates) cost £ 294.10pm( Zurich quote 04 / 03 / 2025). Whilst significantly more, the customer may be in a better financial position to afford it and may be considerably less than the premium based on their actual health.

Customer conversations should emphasise the peace of mind and reassurance this provides them and their family, together with the flexibility and guaranteed insurability it provides in the future. Inevitably though, it will turn to cost and one way of making the new premium more palatable, could be to demonstrate the saving they are making between a WOL and CT policy, or the value the sum assured under the policy is adding over and above the premiums being paid – the Zurich whole of life calculator can demonstrate this.

Control and flexibility Whilst the use of the option within the term, provides control and flexibility – as long as they / you remember they have it – the fact you can phase the conversion at different ages and for different sum assureds( up to the original sum assured under the term policy), can provide added flexibility as customers circumstances change and make the premium increase more acceptable. For example, if the 40-year old above, decided to convert £ 50k every 5 years from age 50 on a JLSE basis, the overall cost would phase as follows:

Age

CT sum assured

CT cost

WOL sum assured( total)*

WOL cost( total)*

Overall cost( CT + WOL)

40 £ 200k £ 37.08pm-- £ 37.08pm 50 £ 150k £ 27.19pm £ 50k £ 48.03pm £ 75.22pm

£ 55.17pm(£ 103.20pm)

£ 62.57pm(£ 165.77pm)

£ 78.95pm(£ 244.72pm)

£ 121.74pm

175.67pm

£ 244.72pm

Zurich quotes 04 / 03 / 2025, non-smokers, CT JLFE, converting £ 50,000 to WOL JLSE. Multipolicy fee discounts apply and * each conversion is a separate WOL policy.

THE BIGGEST OPPORTUNITY,

IS USING A CT POLICY AS AN ALTERNATIVE TO HIGHER WOL PREMIUMS FOR IHT PLANNING, EITHER WHERE COST IS AN ISSUE TO CUSTOMERS, OR WHERE THEY MAY NOT NEED THE FULL COVER

INDEFINITELY.

The total phased cost of £ 244.72pm, is 16 % lower than the full conversion cost at age 65(£ 294.10pm), which might be more digestible. Don’ t forget, every time a customer converts to a WOL policy, you will earn adviser income.

This phased approach may work for buy-tolet landlords that need to cover interest-only mortgages in the early years and IHT liabilities in the later years, but whose plans( and liabilities) may change e. g. if they decide to sell or gift properties.

22 | PROTECTION ADVISER | AUTUMN 2025 |