Aviva Cost of Living Support - Adviser FAQ

Why have you introduced this support now?

The purpose of the scheme is to help customers to retain some part of their valuable cover at a point in time when they feel unable to continue to pay for their policy at its current level. The intention is to allow customers who feel they have no option other than to cancel their cover to explore whether they can afford to keep some cover in place.

The scheme is also designed to make it easy to help customers buy top-up cover after a year or two when the worst of the cost-of-living crisis has passed.

How will you explain the scheme to customers when they contact you about the scheme and what governance is around this?

This process uses our existing governance processes around post-sale flexibility where customers can request to increase or decrease cover under their policy. This is handled by a specialist existing customer team within Aviva who have been trained specifically on how to explain the scheme to customers and provide quotes, where requested.

We do not give customers advice, but instead provide them with information about the costs and benefits of their policy at its current and reduced levels. We also prompt the customer to consider a number of key questions before making a decision.

We always recommend that a customer seeks financial advice before making a decision relating to their policy. If they choose not to seek advice, we will accept instruction from them directly as we do currently with post-sale flexibility requests. For cost-of-living support changes, with the customer’s consent, we will let their financial adviser know what they have chosen to do and copy them into future correspondence.

What impact will the scheme have on commission?

If a customer chooses to decrease their sum assured and monthly payments as part of this scheme whilst the policy is still within the commission clawback window, then a partial clawback will be applied to the amount of the policy given up. Equally, commission will also be payable on any top up cover bought by the customer after one or two years.

The scheme is designed to help customers keep some part of their valuable cover in place, when the only other option may be to cancel the whole policy. By doing so, it not only helps to protect them during difficult financial times, but also keeps them in the habit of paying for protection insurance.

Will customers get the exact same policy/terms/premiums when they top-up?

Any policy that customers buy to top up their cover can be purchased using our streamlined application process, requiring just a few medical questions. The key things to remember about buying a top up policy are:

·       customers can only buy a top-up policy under this scheme that takes their cover back up to a maximum of their previous sum assured. If they wish to buy cover that takes their sum assured beyond its previous level or outside the scheme’s top-up windows at one and two years, they will need to do so using our standard application process;

·       If customers decrease their cover and premiums and want to top up cover, we’ll only be able to offer them the products we offer at the time. These may have different terms and conditions or underwriting and eligibility rules from their current product

·       it’s likely customers will pay more in the future for the same level of cover they have now because of changes in age and/or health and lifestyle meaning that the part of their cover that they are buying as a top-up may be more expensive than when they purchased their original cover. They will continue to benefit from locking in the proportion of their original cover that they keep priced at their original application age and health status.

·       in rare cases, customers may not be eligible for a top-up due to health or age

·       if a customer cancels their policy and re-applies at a later date, their whole cover is likely to cost more because of changes in their age and/or health and lifestyle

Will medical underwriting be required when they want to top up?

If customers want to increase their cover, we’ll need them to complete a streamlined underwriting form and confirm that nothing has changed medically within the last five years. We’ll also need them to confirm their Direct Debit details.

What about customers who bought their policy before 14th November 2016? Why aren’t they eligible? What support is available for them?

We are keen to help all of our customers who are struggling with the cost-of-living crisis. Due to the variety of policies on sale before November 2016, changes to the laws affecting pricing and the time elapsed since people bought their policy, it is not possible to have one scheme in place that covers all customers’ needs.

If you have clients who bought their policy before this date, but who are now experiencing money worries, please contact us via your usual routes to discuss their situation on an individual basis, where we will be able to explore what flexibility exists on their product and what the options are to help them keep their cover.

All customers continue to be able to apply for our short-term payment deferral scheme which allows customers to defer their payments for a period of up to three months and keep their cover in place.

Is the 3-month payment deferral still available?

Our payment deferral scheme is still available to help customers who are experiencing a short-term financial difficulty (e.g. they are between jobs or taking a short period of unpaid leave to look after a loved one). This scheme will continue to run alongside the cost-of-living support and is open to all customers, regardless of when they bought their policy.

How are you communicating this to customers?

We have been identifying customers and advisers with clients who may benefit from this support on in-bound calls to us over the last couple of months. This has worked well, but we recognise that many customers cancel their policy without speaking to you or to Aviva.

We will now be putting information and a quote request form on our website to allow customers to engage with us digitally and to find out more about our support before picking up the phone.  In addition, we will be looking at our communications to customers and including information on the support available, where appropriate.

Are you recommending to customers that they discuss their circumstances with their financial adviser before making any changes?

Absolutely! This is a key part of our current post-sale flexibility processes, and of this new support scheme, which uses the same processes and governance. We always recommend that a customer speaks to their financial adviser before making a decision relating to their policy. This is made clear to customers both when they call us and on our written communications.

If an advised policy is changed by the customer, how will Aviva communicate this with the adviser?

If an advised policy is changed by the customer as part of this scheme, subject to the customer’s consent, one of our sales support team will get in touch with you to let you know what has changed. We will also make sure that we get the right email address from you so that we can copy you into the communications that customers get after one and two years reminding them of their cover and their opportunity to buy top-up cover.