The tool, which is available on Legal & General’s business protection microsite, www.legalandgeneral.com/business, helps advisers to conduct an informed discussion with their clients about the value of the business and the amount of protection it should have. The tool acts as a guide to the levels of cover required based on individual shareholdings and allows the adviser to show the potential financial impact on a business if a shareholder or partner were to be diagnosed with a critical illness or die.
Legal & General recently recalculated the business protection gap at £1.1trillion, of which £400billion was shareholder or partnership protection. Legal & General’s research, conducted with the British Chamber of Commerce revealed that 96% of business owners do not have any shareholder or partnership protection and 44% said that their business would be unlikely to survive a year if a business owner or key individual were to die.
Russ Whitworth, Underwriting and Claims Director for Protection said: “Our research shows that businesses have plenty of excuses for not taking out the appropriate business protection. Many firms have simply never got round to purchasing cover, while others consider such policies to be too expensive or believe it would not impact them or their business. The repercussions of such inertia or lack of understanding could be major and advisers must take the time to get in front of their business clients to explain the potential pitfalls of inadequate protection and the benefits their firm could reap from putting these policies in place. Our valuation calculator is a good way for advisers to drive the message home.”
Russ added: “Even though the sums assured for business protection policies are generally higher than for individual protection, the vast majority would still be below our financial underwriting limits, which means that no supporting financial evidence would be required to assess an application. This makes it easier and quicker to take out cover.”
In an ongoing push into the business protection and high net worth market segment, Legal & General has also launched a prospecting tool for advisers who are looking to take advantage of the business protection gap, but need some guidance on how to start. The guide gives detailed advice on how an adviser can build a business plan to map out a strategy for working in the corporate marketplace. It also covers practical help with pitching to existing or new corporate clients, developing professional connections, networking, marketing and presenting. The new prospecting tool is available from Legal & General’s protection sales consultants.
Clare Harrop, Head of Specialist Protection for Legal & General said: “We are committed to supporting advisers who are looking to generate new income streams and need support moving into this specialist area. We have provided a more accurate figure for the business protection gap and there continues to be a need for more advice for corporate clients to bridge this gap. We will continue to produce informative and helpful tools for advisers and aim to increase awareness amongst business owners of the need for adequate business protection.”
