Using a specialist for relevant life insurance – why Michael Jackson got it right

The Big Boss Borderline 2000

The Big Boss Borderline 2000

 

Have you ever heard the story of when Eddie Van Halen got the call from Michael Jackson to play the guitar solo on Beat It? His initial response was “**** off!” and put the phone down as he didn’t believe it was Michael on the phone. 

What he didn’t get but Michael did, was that when you need a specialist job done you call a specialist. Incidentally Eddie’s record label considered it so uncool for him to play on Michael’s record that they prevented him from appearing in the video.

So I have conversations with generalists all the time  about Relevant Life Insurance. They usually have more professional qualifications than me (chartered, grand wizard etc) and tend to look down on me as a lesser mortal for that reason. But when we get into the nuts and bolts of a conversation about Relevant Life Insurance, it has often has gone something like this… “yeah, relevant life insurance, that’s fairly new isn’t it? There’s only a few providers and they’re pretty much the same aren’t they?”

Well I don’t go down the “I know more than you” route because that’s just being a jerk. I will probably say “well, there’s quite a few providers now and a some interesting nuances to the contracts, for instance…” I’m happy to share the information because holding on to it doesn’t necessarily give you a commercial advantage.

For Relevant Life Insurance there are currently 8 providers, if you discount the ones offering supplementary relevant life policies to group schemes. Like any insurance contract the devil is in the detail.

Here are the main points to consider;

  • Is it transferable?
  • If so is there any further underwriting?
  • Is there any loss of benefits on transferring?
  • What are the multiples of income for levels of cover?
  • What income is allowable?
  • Are there automatic increase options?
  • What are the financial underwriting limits?
  • Are there any other benefits to the contract?

So just as I wouldn’t use a plumber to do my electrics, a drummer to play a guitar solo or a GP for my brain surgery operation. I wouldn’t use a generalist practitioner for my business protection. You might get it right…or you might get water steaming out of your light sockets.

Stay tuned and rock on!