Fidelity Life Commission Guide

Transcription

1 Fidelity Life Commission Guide Part A The Commission Statement Part B Commission Terms Effective: Effective: April 2016 For Fidelity Life advisers and internal use only This is a summary and guide. For full terms and conditions, please refer to your Agency Agreement.

2 PART A: THE COMMISSION STATEMENT Name 1. The client s name and policy number. If more than two lives assured the main Life Assured (youngest life) will be noted here Codes 2. The rider number indicates the number of covers on the policy. The commission calculation is applied to each individual cover, except for rider 0, which is the policy fee. 12 Type 3. The Type code indicates what kind of cover the rider is. For example, 6061 is Life Cover. Refer to pages 3 and 4 for a complete list of codes Premium 4. This is the annualised premium charged for the specified rider. 15 Cover 5. The sum assured for the specified rider. 16 Date 6. The date of the commission run Commission Type Description 7. The commission type can be any of the following: New Business Commission Renewal and Spread Commission Commission Write Back Trail Commission April 2016 Page 1 of 9

3 Amount 8. This column shows the net commission amount. Calculating savings commission Gold Medal and Power Saver (closed to new business) initial commission The maximum commission on the above plans is 5% of Annual Premium Income. This maximum is irrespective of the term of the contract. There is an additional administration charge of 1% of the API for regular contribution during the first year of the first year of the policy. This is not paid to the adviser. For example $100 per month on full commission basis: Total initial commission = 5% x (100 x 12) = $60 Total cost on the contract in the first year is: Commission payable to the adviser $60 Plus additional administration charge of 1% deducted from client balance in the first year to Fidelity Life $12 Total cost of policy deducted from client balance in the first year = $72 Reducing the commission on the $100 per month contribution would alter the calculation as follows: Example 75% commission 50% commission 25% commission 3.75% 2.5% 1.25% Calculating Risk Commission The relationship between the annual premium figure and the gross commission is determined as follows: The premium quoted is inclusive of GST, payable on the following riders: - Trauma/Critical Care, Trauma Multi - Income Protection, Business Expenses - Total and Permanent Disablement - Waiver of Premium GST is not payable on Life Cover, Family Income, Terminal Illness, Accidental Death, Funeral Funds, Golden Life plans or on investment premiums. The following formula is applied for a GST-able benefit: e.g. Premium x agency commission rate / For life assurance riders the formula simply omits the GST component: e.g. Premium x Agency Rate. Commission on terms less than 10 years The full 100% base commission rate assumes a 10 year minimum term. Shorter-term contracts have the commission calculated proportionally to the number of years, i.e. an eight year risk contract will receive 8/10 commission or 80%. A typical situation in which this could occur is on an Income Protection plan where the life assured is 57. If the plan expires at age 65, there would be eight years remaining on the term, so the maximum risk commission rate would reduce accordingly. Assuming an agency rate of 175% and an annual premium of $1, and 80% up front this would relate to the commission statement as follows: Eight years to end of term so: 8 (number of years) x10% (commission per annum%) = 80% (proportional commission%) Reserve 9. This column shows the percentage of the commission that has been credited to your reserve account if you have chosen this arrangement. Refer to page 7. Closing Account Balance 10. The balance is the net commission plus GST, and less reserve and retention payments. Adviser 11. This is your agency number. Policy Total 12. If there is more than one rider, the Premium, Amount, GST, Reserve, and Retention amounts will be sub-totaled. Totals 13. All Commission Balance amounts, excluding sub- totals. Closing Account Balance 14. Grand total Balance and following factors: +/- The movement in your superannuation fund (if applicable) +/- Interest on your reserve account (if applicable) +/- Interest on your current account balance (if applicable) - The % of balance to service debt (if applicable) - Withholding Tax (if applicable) = Total amount paid, OR = Total amount carried forward (if a debit balance, or the total payable is less than $10). Reserve Account 15. Reserve account balance. Risk Commission 16. Risk Commission paid over last five quarters. Risk and Investment Premium updated 17. Provides gross and net new premium on a quarterly basis. Download Commission Statement 18. Download the commission statement into an Excel spreadsheet. If you choose to export your commission statement into Excel, there are five main codes in the account field that relate to different types of commission: 1201 New Business Commission and Writebacks 1202 Renewal and Spread 1203 Group Life 1204 Trail Commission 1205 Bonus Other codes may be used, and they will be described with a comment. My Persistency 19. This persistency figure is obtained by calculating your qualifying in force premium from the previous four quarters and measuring what is still in force as at the current quarter. Check Potential Writeback 20. This identifies policies one or two months in arrears. Persistency 21. Provides a snapshot of persistency over the past four quarters. 175% x $ x 80% x 100% x 80%/1.15 = $1, (Agency Rate) (Annual Premium) (Up Front) (IP Rate) (Term) (Commission Paid) Calculation formula: Agency rate x Annual Premium x Term (80%) x up front x 100% IP rate / GST = Commission paid. April 2016 Page 2 of 9

4 Code Name Code Name Code Name POLICY CODES 13 Mortgage Repayment Insurance 16 Mortgage Protector Plan / BFS Mortgage Protector 26 A Gold Medal Plan B Whole of Life Plan C Future Finance Plan D Independent Retirement Account F Corporate Life Plan K Just for Kids Plan 60 Level Term Policy 61 Protection Plan 62 Platinum Plus 66 Funeral Fund 67 Golden Life Plan 70 Life Bond 71 Annuity Bond 72 Life Care Bond 74 Power Saver RIDER CODES 6 Protective Life Benefit (Just for Kids) 7 Future Insurability (Just for Kids) 16 Gift of Guarantee (if Policy Type is 16) 16 Mortgage Protector (if Policy Type is not 16) 17 TPD Family Income Benefit 18 Standalone Total & Permanent Disablement 19 Accelerated Total & Permanent Disablement 25 Gold Medal Plan 40 Accidental Death Benefit 41 Terminal Illness Booster Benefit 45 Critical Care Protection 46 Critical Care option under Family Income Benefit 47 Life Care Benefit 48 Standalone Critical Care 49 Critical Care Accelerated benefit 50 Indemnity Income Protection 52 Business Overheads 53 Waiver of Premium Rider Codes (continued) 54 Agreed Value Income Protection 56 Mortgage Protector Income Protection 57 Premium Protection Benefit 59 Business Disability Cover 60 Level term 61 Life Assurance 63 Family Income Benefit 64 Life Care Bond Risk 65 Child s Income Benefit (Just for Kids) 66 Funeral Fund 67 Golden Life Plan 70 Life Bond 71 Annuity Bond 72 Life Care Bond 74 Power Saver PLATINUM SERIES 9007 Child s Future Insurability 9018 Standalone TPD 9019 Accelerated TPD 9047 Life Care Benefit 9048 Standalone Trauma 9049 Accelerated Trauma 9050 Disability Income (Indemnity) (If farmer then this is Rural Disability Income) 9052 Business Expense 9053 Waiver of Premium 9054 Rural Disability Income (Agreed Value) 9058 Defined Disability Income (Optimal Insurance) 9059 Business Disability 9060 Level Term 9061 Life Assurance 9063 Survivors Income 9101 TPD extension of Accelerated Trauma LUMLEY SERIES 9102 TPD extension of Standalone Trauma 9907 Children s Future Insurability 9918 Standalone TPD 9919 Accelerated TPD 9948 Standalone Trauma/ Children s Trauma Cover 9949 Accelerated Critical Illness/ Accelerated Trauma 9950 Disability Income (Indemnity) 9952 Business Expenses 9958 Optimal Cover (Defined Disability Income) 9960 Level Term 9961 Death Benefit (Life Assurance) 9963 Survivor s Income PLATINUMPLUS SERIES 6007 Child Insurability Option 6016 Mortgage Protection 6017 TPD Survivor Income 6018 Standalone TPD 6019 Accelerated TPD/Accelerated TPD Level Term 6041 Terminal Illness Booster 6042 Trauma Multi Standalone 6043 Trauma Multi Accelerated 6046 Trauma Survivor Income 6047 Life Care/Life Care Level Term 6048 Standalone Trauma 6049 Accelerated Trauma/ Accelerated Trauma Level Term 6050 Indemnity Disability Income/ Indemnity Disability Income Level Term 6051 Redundancy benefit under Mortgager Protector Plan. (calculation details see 09C 1.7) 6052 Business Expenses 6053 Waiver of Premium /Waiver of Premium Level Term 6054 Rural Key Person (similar to Platinum 9054 Rural DI) 6055 Agreed Value Disability Income/ Agreed Value Disability Income Level Term (similar to old Platinum 9050 DI) 6056 Mortgage Protection DI (similar to Fidelity Life Mortgage Protection IP type 56) 6058 Defined Disability Income 6059 Key Person 6060 Life Cover Level Term 6061 Life Cover 6063 Survivor Income 6065 Child Income Benefit JFK (continued over) April 2016 Page 3 of 9

5 Code Name Code Name Code Name PRODUCT CODES PLATINUMPLUS SERIES (continued) 6250 Income Protection (Indemnity) 6252 Business Expenses 6253 Waiver of Premium Includes all in force benefits except: 6050, 9050, 6150, , 9052, , , , 9058, Rural Key Person 6255 Income Protection (Agreed Value) 6256 Monthly Mortgage Repayment 6258 Defined Disability Income 6259 Key Person 6350 Retirement Protection PRODUCT CODES LIFE 360 LLC Life Cover LMR Mortgage Protection LPD Permanent Disability LTR Personal Trauma LFI Income Protection LIP Personal Income Protection BUSINESS 360 BLC Life Cover BPD Permanent Disability BTR Business Trauma BIP Business Income Protection PRODUCT CODES OTHER LEGACY PRODUCTS FC Life Cover FP Life Cover LI Life Cover ACC Accidental Death ALC Income Protection ASB Mortgage Protection BEX Business Expenses BPP Borrowers Protection Plan DIP Income Protection DRC Term Life DSA Decreasing Life DWL Whole of Life EIP Income Protection FIP Income Protection GIP Guaranteed Issue Life GRT Guaranteed Renewable Term IPP Income Protection MRA Mortgage Repayment MRS Mortgage Repayment PTB Permanent Term Life SCT Serious Care SER Serious Care TER Life Cover TLP Loan Protection TRM Term Life TRO Term Life UBS United Bank Life YRT Renewable Term Life April 2016 Page 4 of 9

6 PART B: COMMISSION TERMS Standard commission terms are as follows: Regular Premium Commission % of AP Maximum Upfront Renewal % Service Commission Trail Commission p.a. Gold Medal Type Power Saver/ Bonds (Closed to new business) 5% 5% Up to 5% No No 0.3% + up to 0.7% service fee for Power Saver and Bonds Risk Premiums (Including risk premiums on Gold Medal type) (Closed to new business) Platinum Plus YRT All covers 10.0% p.a. for max 10 year term and to age % 20% - 100% 6% 4% No Platinum PLUS Level Term All Covers 8.0% p.a. for max 10 year term and to age 75 80% 50% - 100% 6% 4% No Funeral Fund (Agency Rate does not apply) Golden Life (Agency Rate does not apply) 100% 100% API 100% No No No 30% 30% API 100% 30% No No Group Life 0% 0% - 25% 0% - 25% 0% - 25% No No Single Premium Gold Medal Type Life Bonds (Closed to new business) Up to 5% 5% 100% No No 0.3% plus up to 0.7% service fee for PS/Bonds April 2016 Page 5 of 9

7 Commission Reversal charts Months that premiums are paid Amount of upfront commission taken in first year Months that premiums are paid Amount of upfront commission taken in first year 20-50% % 20-50% % 0-4 months 100.0% 100% 15 months 0 45% 5 months 87.5% 95% 16 months 0 40% 6 months 75.0% 90% 17 months 0 35% 7 months 62.5% 85% 18 months 0 30% 8 months 50.0% 80% 19 months 0 25% 9 months 37.5% 75% 20 months 0 20% 10 months 25.0% 70% 21 months 0 15% 11 months 12.5% 65% 22 months 0 10% 12 months 0 60% 23 months 0 5% 13 months 0 55% 24 months 0 Nil 14 months 0 50% POWER SAVER (regular contributions only) Months that premiums are paid Commission writeback 0-4 months % 5 months 87.50% 6 months 75.00% 7 months 62.50% 8 months 50.00% 9 months 37.50% 10 months 25.00% 11 months 12.50% 12 months Nil N.B : For GMC qualification 100% of the premium is written back on any discontinued policy within the first 24 months. GOLDEN LIFE WRITEBACK CHART Months that premiums are paid Commission writeback 0-6 months % 7 months 83.30% 8 months 66.64% 9 months 49.98% 10 months 33.32% 11 months 16.66% 12 months Nil April 2016 Page 6 of 9

8 Spread Commission Fidelity Life promotes a spread commission model, meaning higher renewals for the life of your policies. When anything less than 100% commission upfront is taken, the difference is put into spread commission (also known as deferred initial commission). A minimum of 20% upfront commission must be taken. The amount spread into subsequent years is multiplied by (100% - selected upfront %) and paid annually for the remaining term of the contract. Spread commission is paid in addition to renewal commission. The spread commission and the agency rate is fixed for the life of the contract, at the commencement of the contract. See below an example of the spread commission calculation: Deferred initial commission x agency rate There is no spread option for savings contracts. Renewal Commissions x 20% (standard renewal basis) = spread commission Renewal commission is payable from year two onwards as premiums are received. There is no longer any renewal commission on any investment policies, including Gold Medal. Renewal commission is retained by the originating adviser, unless the client is sold to a new servicing adviser. Service Commission Service commission will be paid subject to the adviser demonstrating to Fidelity Life that they are maintaining their clients with Fidelity Life and their risk in-force book is greater than $100,000. Once the adviser has received a service commission, Fidelity Life may not remove these commissions from the agency unless the persistency of the in-force book falls below 90% at any time. The service commission is currently set at 4%. The calculation of the total renewal commission percentage is as per below: Spread commission + Base renewal commission + Service commission (if applicable) Commission Reversals If a policy or cover is discontinued or reduced, other than due to death or a claim for TPD or Trauma, a percentage of commission paid will be reversed. This will appear on your commission statement as a writeback. This indebtedness to Fidelity Life is payable whether or not the agency agreement is in force. All debit balances on Fidelity Life agencies are subject to interest charges. The interest percentage is subject to change, and is calculated daily and applied each commission run. The percentage sliding scale for commission reversals is on page 6. Trail Commissions and Service Fees Trail commission is paid on investment policies (Gold Medal, Life Bonds, Annuity Bonds and Power Saver, all of which are closed to new business). Trail commission is calculated as 0.3% of the average value of the policy (if positive). For Life Bonds, Annuity Bonds and Power Saver, a service fee of up to 0.7% through cancellation of units can be selected by the adviser with the agreement of the client. Trail commission and service fees are paid quarterly as a single payment. Reserve Account The Reserve Account is a voluntary account into which a percentage of your commission may be paid and interest will be credited. Please note that should your agency incur a debit balance that relates to commission, we reserve the right to use a positive Reserve Account balance to off-set the debit balance. We will give you seven days written notice via if we intend to use your Reserve Account balance for this purpose. Agency Rate The Agency Rate is incorporated into the upfront commission payment. Products that do not use the Agency Rate in the calculation are Golden Life and Funeral Fund. Own Life Business The commission rate for business written on the adviser s own life, the life of a spouse/partner, children, and parents shall be zero. Business on an adviser s siblings will receive commission to a maximum of 20% upfront with the balance being put into spread commission (deferred initial commission). Business written on the adviser s own life, life of a spouse/partner, children, parents, and siblings will not qualify for incentive purposes. Shared Commission You may receive a share of all the commission on all premiums received by Fidelity Life on products procured by agents operating through your office. The total commission payable to you and your agent shall not exceed the amount shown in this Commission Guide. April 2016 Page 7 of 9

9 Commission Settings - Desktop Apollo If you would like help on how to change your Commission settings please click on the symbol on the bottom right corner. To set the commission defaults - please refer to page 6 of the Apollo Help Guide. To view and edit commission and discount options, please refer to page 12 of the Apollo Help Guide. April 2016 Page 8 of 9

10 Commission Settings Web Apollo The commission defaults can be set under the Commission tab in the My Details section. To view the commission details on an individual illustration you can click the arrow next to the Technical Information heading. The commission details will then be visible for you to edit for each individual illustration. April 2016 Page 9 of 9