Part of your responsibility as a provider of finance solutions is to help ensure that your clients are fully prepared for whatever the future may bring. This is why discussing insurance options with your client is important.
ALI Group protects Australian home and property buyers from financial hardship. They offer a Loan Protection Plan (LPP), which you can access via Mercury. The purpose of the integration is to make the process of offering your clients ALI insurance products a quick and easy task.
The ALI Loan Protection Plan (LPP) is an insurance policy that provides 3 benefits payable to the client (or their estate) including:
- Living Benefit (often called trauma)
- Death and Terminal Illness Benefit, and
- Involuntary Unemployment Benefit.
Unlike mortgage protection products traditionally offered by banks and non-bank lenders, ALI products pay the borrower or their estate directly – allowing them to choose how to use their benefit funds.
- The benefit is paid directly to the client (or their estate), allowing them to choose how they want to use the payout
- No Medical Required (pre-existing conditions may be excluded)
- The Loan Protection Plan Policy is not linked to the client’s loan. So, if they refinance, change lenders or pay out their loan – they’re still protected (for the life of the policy).
Broker experience: Richard Wright from V Homeloans
Did you know...
- Australia is proven to be one of the most under-insured nations in the developed* world. Couple this with the fact that cover in superannuation is generally only 30% of the recommended level for an average young family** and you can see the need for informing your clients about protection.
- Helping clients mitigate the risks of entering into large debt by offering peace of mind that if something unexpected were to occur like redundancy, a serious illness or even death, they have a financial back up plan in place.
- Loan Protection is good for the client and great for your business. Having the offering and a solid process in place, you can help your clients protect the asset they worked hard to buy and maximise your income potential by diversifying your income streams.
Client discussion points
Clients often assume they have cover in their super. It's important to educate clients as follows:
- Recent changes to superannuation funds have seen the removal of default life insurance. Many Australians might not be aware their cover has been removed.***
- Cover in superannuation is generally only 30% of the recommended level for an average young family.^
- Superannuation funds have not been allowed to offer trauma cover to new members since mid-2014.^^
Brokers should urge their clients to thoroughly review the coverage they have in place within Superannuation.
Why you should offer ALI loan protection
- Diversify your business income through protecting your client and create long term trust and value
- Loan protection takes less than 10 minutes to put in place
- Given Brokers are providing the clients with debt they should be having robust conversation about protecting themselves and their assets/financial goals
- Since 2003, ALI Group have protected over 200,000 Australians with over $55 billion in cover (current as at Jan 2020), they have a network of almost 4,000 authorised brokers nationwide who support their mission to be the leading provider of choice for all Australian mortgage brokers and their customers.
Any associated costs
- Nil associated costs for the Broker
- ALI cover related costs including PI insurance linked directly to offering Loan Protection under ALI Group AFSL
- ALI cover all Marketing associated costs (printing, postage etc).
How does a broker sign up?
- Speak to the local ALI BDM noted in Mercury or express interest via https://www.aligroup.com.au/mortgage-brokers
- Brokers will complete a short online training module, followed by training from their BDM. The BDM will then support the broker ongoing to embed this process into their business
- More information available here.
How is this product implemented into the broker's business?
- Training is provided during the authorisation process. Brokers will build the loan protection discussion into their current loan process and initiate the policy themselves (no hand offs).
ALI Group is side by side with brokers, helping to protect Australian home and property buyers from financial hardship. ALI is dedicated to promoting the unique value brokers have to their customers. ALI maintains constant contact with ASIC, AFCA and other regulators to ensure they are well placed to support our network of brokers and their clients, both today and in the future. The fundamental message to all regulators is that for over 16 years, ALI have put the policyholder interest above excessive profit margins and excessive commissions.
*Lifewise [accessed at: http://www.lifewise.org.au/facts-research]
**Rice Warner, Underinsurance in Australia (2015)
***Time to Check website [accessed at: https://vimeo.com/340568959]
^Rice Warner, Underinsurance in Australia (2015)
^^ASIC, Money Smart [accessed at: https://www.moneysmart.gov.au/insurance/life-insurance/trauma-cover]
Loan Protection Plan is jointly issued by Hannover Life Re of Australasia Ltd ABN 37 062 395 484 (Death, Terminal Illness, Living and Accidental Injury Benefits) and QBE Insurance (Australia) Limited ABN 78 003 191 035 AFSL 239545 (Involuntary Unemployment Benefit). It is distributed by Australian Life Insurance Distribution Pty Ltd ABN 31 103 157 811 AFSL 226403 (ALI). ALI receives commission for each policy sold. Any advice provided is of a general nature only and does not take into consideration your personal objectives, financial situation or needs. You should consider the Product Disclosure Statement when deciding if this product is appropriate for you.