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CHRISISM #43 - Trimming the Platinum Package

14 June 2017

Trimming the Platinum Package

As those of you who have been to my Risk Workshop will know, the types and levels of cover that I would be recommending to my client up front are called "The Platinum Package", and typically this would not be affordable for the majority of clients. The process of trimming the platinum package to accommodate the client’s budget will therefore usually be one of the 12 steps of my initial advice process.


So the platinum package will be made up of the types and levels of cover that would be required to achieve ALL of the financial outcomes that the client has told me they would WANT in the two specific “what if” scenarios on the Fact Find. Unless the client is pretty young and cashed up, the platinum package is usually going to be unaffordable day one.

When going through the Fact Find, I will have pre-positioned the likelihood of the client’s personal protection package costing somewhere between 4% and 5% of the income that they are securing either for themselves in the event of illness or accident of for their family in the event of their death.

Despite this, more often than not, when the client’s eyes drift to the bottom of the “Circle of Safety” page (which details the recommendations), where the total annual premium is situated, there will typically be a sharp intake of breath and then we take it from there! The sharp intake of breath is manageable, as we simply move to a discussion as to “How close to that figure can you get day one?”. What you want to avoid is a “run for the door” reaction, which is not so manageable”! In this instance, you may want to do a little trimming before you present the recommendations.

It is really important that you present the types and levels of cover in the platinum package as your “recommended strategy” in the SOA, as these are the types and levels of cover required to achieve the financial outcomes the client has told you they want on the Fact Find. You will then need to have another section in your SOA which I called “Client’s Actions”, which detailed the types and levels of cover that the client was proceeding with day one and the reason for the trimming i.e. affordability.

When trimming the platinum package, the one thing we want to avoid if at all possible is any impact on the sums assured, as it will be the sums assured that create the financial choices at claim time, so may need to think a little bit outside the square (thereby demonstrating to your client you detailed product knowledge) when offering alternative ways of reducing the cost without impacting on the sums assured.

Below are just some of the options you may want to discuss with your client:-

Mode of premium payment – since at least your Trauma & IP recommendations would probably initially be on level premiums, this opens up the options of a split between stepped and level premiums
• Length of waiting period on their Income Protection including the option of a split waiting period (especially for higher earners)
The relative merits of "bells and whistles" i.e. optional extra benefits on the policies, some of which may represent more value than others
• Own occupation vs Any occupation on TPD & Agreed Value vs Indemnity on Income Protection

This is by no means an exhaustive list of options, but they certainly create plenty of scope for trimming the platinum package with minimum impact on the sums assured.

If any of the above ideas have resonated with you, then imagine how much you would get out of a whole day of ideas!! Well, you don’t have to imagine! Just click on the link below and REGISTER NOW for my upcoming Risk Workshop in your capital city in the coming weeks. I look forward to seeing you there.

Register for your City using the links below.
Cost: $450 + GST per person
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Time: 9.00am – 4.30pm

Sydney - Tuesday, 18 July

Melbourne - Friday, 21 July

Adelaide - Wednesday, 26 July

Perth - Thursday, 27 July

Brisbane -  Wednesday, 2 August

The Risk Workshop by Chris Unwin

Are you a financial adviser who would like all of your clients to have appropriate types and levels of personal protection? But perhaps you feel you need a more structured and client friendly engagement process?