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Ok Ian, I know you have done this several times previously.
A nil commission risk product would normally reduce the annual premium by approx 30%.
Let's take a $5000 annual premium example and strip the commission to nil thereby reducing the premium to approx $3500 in the first year.
Currently at an upfront commission rate of 70%, the adviser would receive approx $3500 initial commission.
Lets say the process of placing the insurance takes 3 client meetings, underwriting and medical follow ups, Statement of Advice and compliance document requirements etc resulting in a time commitment of approx 12 hours.
At an hourly rate of $200 this would equate to an advice fee of $2400 plus the annual premium of $3500.
This now equates to an initial cost to the client to implement the insurance cover of $5900.
This is an increase in initial cost to the client of 18%.
With the cost of insurance cover being a major obstacle to the take up of personal risk insurance cover in the first place, a significant increase in the first year cost to the client will be an even further deterrent to implementing the cover they need.