more 2 life Welcome to our webinar Welcome to our webinar Enhanced Equity Release 1 Introductions Stuart Wilson Channel Marketing Director • • 25 years’ Financial Services experience Worked for Primetime Retirement/Living Time, LV=, Just Retirement and Friends Life Mike Millar Head of Sales • • Previously Equity Release Director at Partnership Focused on product development and worked on pioneering products including introducing enhanced equity release into the market 2 Agenda • Learning outcomes • more 2 life • The market • Drivers for change/growth • The challenge • Asking the right questions • Enhanced Plan • Q&A Learning outcomes • After this webinar you will have an understanding of and be able to identify: 1. The opportunities and growth in the lifetime mortgage market 2. The challenges in the market and the need to ask your clients about their health and lifestyle 3. The benefits of asking the right health questions Housekeeping • Raise a hand • Ask a question Will copies of the slides be available? Send 5 Enhanced Equity Release: Are you asking the right questions? Mike Millar About us • more 2 life is an innovator and pioneer in LTM market. • New management team Dave Harris, M.D, Will Hale, Business Development Director, Stuart Wilson, Channel Marketing Director and Mike Millar, Head of Sales. • Continues to focus on adviser firms with marketleading products and special deals. • Looking at new funders Growth of Lifetime Mortgage market • Market enjoying new boom • Lending levels back to pre-credit crunch levels and set to grow further 2011 £788.6M Source: Equity Release Council 2012 £925.7M 2013 £1.07B Drivers for change/growth… • Ageing population – average male life expectancy at age 65 now 22 years, will be 25 by 2050 • Retirement saving shortfall • Rise of retirees who are asset rich / cash poor • Cultural shift to lifestyle vs. inheritance obligation • Long-term care funding need Drivers for change/growth… • Recent Budget announcements will stimulate innovation and awareness changes to annuities will require “a whole different approach to funding retirement” Paul Smee, Director-General, CML Drivers for change/growth… Changing face of retirement Harold Harry (great grandson) • • • • • • Retired at 65 Life expectancy limited (c.5 years) Retirement planning choices limited (annuity) Retirement is phased Life expectancy 20+ years Holistic retirement planning choices huge…and about to get bigger Drivers for change/growth… Equity Release following annuity model Standard Lifetime Annuities Standard Equity Release Enhanced Annuities (Over 1000 conditions) Smoker Annuities Enhanced Equity Release The challenge • PAFS introduced medically underwritten annuities into the UK in 1995 • By 2004 less than 10% of the annuities bought were enhanced. • Heightened awareness and the introduction of TCF meant that by 2013 as many as 60% of annuitants could qualify for some form of enhancement. The challenge • Around 2009 a website appeared www.missoldannuity.co.uk • The ambulance chasers are now on the case “Have you been asked medical questions?” “No, why?” “You could be entitled to compensation” The challenge What’s this got to do with equity release? Everything • Under TCF outcome 4 you must take all your client’s circumstances into consideration. • Do you always ask your clients about their health? The challenge How many clients who would have qualified for an enhanced LTV received a standard one instead? 2007 Enhanced Equity Release first launched in UK 2014 Did you know? Did you know? The question you shouldn’t ask Are you fit and healthy? He doesn’t need to know about the statins I take… Fit as a butcher’s dog! The questions you should be asking + Health Questions NO YES OR If you smoke manufactured cigarettes, have you smoked 10 or more cigarettes per day for the last 10 years? The questions you should be asking + Health Questions NO YES OR Have you suffered from a stroke (CVA), excluding ministrokes (TIAs) ? Our Enhanced Plan at a glance • Takes into account health and lifestyle conditions to allow a larger release No medical examination required No monthly repayments The loan, plus interest, is repaid when the property is sold Cash facility available so your client can release more money in stages if they wish to* – Protected Equity Guarantee option meaning an inheritance can be guaranteed to your clients’ beneficiaries – Straightforward application process – – – – * Subject to prevailing criteria at the time of application for further funds. Enhanced Plan eligibility • For our Enhanced Plan, clients must meet the following lending criteria: – There is no maximum age – Have a health or lifestyle condition which makes them eligible for the Enhanced Plan. – Have UK or EU citizenship with permanent rights of residency in the UK – Resident in the UK and able to provide an address history covering the last 36 months – Property must have a minimum valuation of £60,000. Maximum loan amount is 100% of the LTV on first million and 50% of the LTV on second million. – If the property is leasehold, our criteria for the minimum number of years left on the leasehold must be met. Enhanced LTVs - examples 5minutes 13questions +£15,000 USPs • Enhanced/Max cash – Enhanced terms based on age, lifestyle and health (higher LTVs ) – Drawdown available – Protected Equity Guarantee (PEG) – Medical questions • Cancer not restricted to last 5 years • Parkinson's no requirement for aids for everyday living • MS no requirement for aids for everyday living Questions… More information… This is a lifetime mortgage. To understand the features and risks ask for a personalised illustration.