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Individual Rates Document

ProActivLife - Personal Protection ExpertsIndividual Rates Document

INDIVIDUAL RATES DOCUMENT

Commission terms as described below apply to insurance arrangements put in place on or after 01/05/2023

 

1. BASE INITIAL COMMISSION CREDIT

The Base Initial Commission Credit represents a specified percentage of the annualised premium volume (APV). The annualised premium volume represents the total insurance premium payable by the Customer to the Insurer over the first 12 months of the plan, following contractual terms. Base Initial Commission is divided between two types of commission credit. The split of these two payments is always in an equal proportion.

  • The specified below APV amount of Initial Commission Credit for advice and an arrangement is payable for each new long-term protection policy application submitted by the “Registered Individual”. No Initial Commission Credit applies unless the policy is put at risk and the Insurer forwards the commission payment to ProActivLife Ltd. The policy needs to be on risk in the full Initial Risk Period specified for each Product Provider to generate a full Base Initial Commission Credit.
  • Specified below APV amount of Initial Commission Credit if payable for client service within the full Initial Risk Period as a “Registered Individual” of ProActivLife Ltd. The Initial Risk Period is specified for each insurance provider.
    For Vitality Life products, please be aware, that Vitality Plus or Vitality Lite membership is excluded from insurance premium as this does not constitute an insurance premium, and the commission is not payable for membership value.
    We offer three different agency options which would differ in the way how Base Initial Commission is payable:
  • 50:50 Terms (50%IT + 50% NIT)
  • Indemnity Terms (IT)
  • Non-indemnity Terms (NIT)

 

INDEMNITY TERMS

Where the indemnity commission payment is applied, then both Base Initial Commission – Advice and Arrangement and Base Initial Commission – Client Care Service are payable upfront upon business introduction in exchange for service and assurance that policy wouldn’t lapse within the Initial Risk Period.

If a client cancels the policy in the Initial Risk Period, then the Registered Individual is not entitled to receive full commission credit in respect of that policy, and Initial Commission Credit already given must be refunded by the Registered Individual and can be deducted from any other sum owed to him or her at any time. If the policy is canceled or falls into a state of lapse during the Initial Risk Period clawback of Initial Commission Credit will be activated based on the number of the premium received by the Insurer in line with Product Provider claw-back procedure.

If a Registered Individual ceases its authorisation as a ProActivLife Ltd representative, and as a result would stop providing customer care service to its clients, then any unearned Initial Commission Credit- Client Care Services must be refunded by the Registered Individual.

NON INDEMNITY TERMS

Where the non-indemnity commission payment is applied, then both Base Initial Commission – Advice and Arrangement and Base Initial Commission – Client Care Service are payable as a regular monthly commission entitlement divided into equal installments payable over the Initial Risk Period. This option does not generate claw-back risk. However, if the client cancels the policy in the Initial Risk Period, then the insurance provider stops paying commission installments. In case a Registered individual loses their insurance license and isn’t able to provide customer care service, then there is no eligibility for payment continuous.

 

50:50 FINANCIAL TERMS

Where 50:50 terms are applied, then Base Initial Commission – Advice and Arrangement are payable on an indemnity basis, and Base Initial Commission – Client Care Service is payable on a non-indemnity basis.

This means Base Initial Commission – Advice and Arrangement is payable upfront upon business introduction providing assurance the policy wouldn’t lapse within the Initial Risk Period. If a client cancels the policy in the Initial Risk Period, then the Registered Individual is not entitled to receive full commission credit in respect of that policy application, and Initial Commission Credit already given must be refunded by the Registered Individual and can be deducted from any other sum owed to him or her at any time. If the policy is canceled or falls into a state of lapse during the Initial Risk Period clawback of Initial Commission Credit will be activated based on the number of the premium received by the Insurer in line with Product Provider claw-back procedure.

The other part of Base Initial Commission – Client Care Service is payable as a regular monthly commission entitlement divided into equal installments payable over the Initial Risk Period. This option does not generate claw-back risk. However, if a client cancels the policy in the Initial Risk Period, then the insurance provider stops paying commission installments. In case a Registered individual loses their insurance license and isn’t be able to provide customer care service, then there is no eligibility for payment continuous.

 

Adviser Competency and Engagement Status

The Company’s Financial Reward Structure recognised two adviser statuses which will affect eligibility to the level of Initial Base Commission or Additional Commission Level. This is fully described under the Additional Commission Credit section.

The Registered individual competency status will affect the eligibility for Additional Commission Credit only.
The Registered Individual’s engagement status will affect the eligibility to the level of Base Initial Commission Credit and access to other Company’s benefits. The Company operates four engagement levels.

Standard Engagement Status – This commission baseline is guaranteed and payable regardless of other factors such as quality and performance level.

Vitality Life Base Initial Commission Credit – Core Term Solution
(Life Cover, Serious Illness Cover, Income Protection, Relevant Life, Business Protection)

  • OVER 12 years – STANDARD BASELINE – 80% APV
  • 11 years – 80% SBL
  • 10 years – 70% SBL
  • 9 years – 60% SBL
  • 8 years – 50% SBL
  • 7 years – 50% SBL
  • 6 years – 40% SBL
  • 5 years – 40% SBL
Term VS Payment for Baseline commission for specialised Income Protection

As some of our clients do not qualify for a product offered by Vitality Life, the extended panel of specialist providers and a product is available to our advisers. There is no enhanced commission credit available with this product range.

  • Over 14 years – STANDARD BASE LINE – 50%APV
  • 13 years – 90% SBL
  • 12 years – 80% SBL
  • 11 years – 80% SBL
  • 10 years – 70% SBL
  • 9 years – 60% SBL
  • 8 years – 60% SBL
  • 7 years – 50% SBL
  • 6 -5 years – 40% SBL

 

2. ADDITIONAL COMMISSION CREDIT

(“QUALITY & PERFORMANCE COMMISSION CREDIT” )

It is an additional commission payment on top of Basic Commission Credit. It is divided into two types commission credit for advice, arrangement credit, and client service credit within the initial risk period. The payment structure follows the same rules as Basic Commission Credit.

ADDITIONAL COMMISSION CREDIT FOR CORE  RANGE OF VITALITY LIFE PRODUCTS
  • Trainee – 0% APV
  • PreCAS – 10% APV
  • CAS Status – 20% APV
ADDITIONAL COMMISSION CREDIT for EXTENDED RANGE OF INCOME PROTECTION PROVIDERS
  • Trainee – 0% APV
  • PreCAS – 15% APV
  • CAS Status – 30% APV

3. CLAW-BACK LIABILITY

The provision of claw-back liability applies to indemnity commission payments both for Basic Commission Credit and Additional Commission Credit. It applies to all long-term products: Vitality Life, LV, Cirencester Friendly, Holloway Friendly, Aviva and Royal London.

ProActivLife Ltd would claw back Register Individual Indemnity Terms claw-back based on calculations using the Product Providers standard claw-back rules for all policies lapsed within the Initial Risk Period and several outstanding service months for cased authorisations. Please see below the claw-back risk period for each Product Provider.

Product Provider – Claw-back ( Initial Risk Period )

  • Vitality Life – 48 months
  • Vitality Health – PMI – 12 months
  • LV – 48 months
  • Cirencester Friendly – 36 months
  • Holloway Friendly – 36 months
  • Aviva – 24 months
  • Royal London – 24 months

4. NON-CORE INSURANCE: GENERAL RANGE – COMMISSION PAYMENT

PRIVATE MEDICAL INSURANCE – VITALITY HEALTH (Personal Protection only)

The commission from Vitality is payable on an indemnity basis. The “Company” is paying to “Registered Individual” an initial commission of 30% of the Annualised Premium Value. For commission calculation, Insurance Premium Tax needs to be excluded from annualised premiums.

ACCIDENT INSURANCE –  METLIFE MULTI PROTECT

This policy is a non-core insurance contract. The commission from a provider is payable on a non-indemnify basis, based on the amount of premium payable by the customer each month. The “Company” is paying the “Registered Individual” 20% of the monthly premium payable by the customer to the insurance provider upon payment receipt from an insurance provider. Commission for the sales of the Accident Plan is free from the claw-back provision.

 

5. GROWTH SHARE OPTIONS – RECRUITMENT OVERRIDE COMMISSION

When a Registered Individual successfully introduces a “New Registered Individual” to the company, the “Company” will award an override commission to the introducing “Registered Individual”. This recruitment commission override is calculated at 10% of the Annualised Premium Volume (APV) from each policy sold by the recruited “New Registered Individual” within the core and extended Income Protection proposition, for the duration of their appointment with the “Company”. This includes sales of plans from Vitality Life, Cirencester, LV, Holloway Friendly, Aviva, and Royal London. Commissions from non-core insurance and any bonuses or incentives are not included in this arrangement.

The override commission is paid on an indemnity basis and is subject to the same clawback provisions as the Initial Commission Credit. This means that any policies that lapse will result in deductions from the ongoing recruitment override commission payment or will be offset against commission payments. The continuation of the recruitment override payment is contingent upon the recruiting “Registered Individual” maintaining their contract with the “Company”.

The recruitment override commission is paid to the introducing Registered Individual on a monthly basis. The “Company” will make these payments to the “Registered Individual” on the 25th of each month, covering the period from the 1st to the 31st of the preceding month, upon receiving commission from product providers. The “Company” reserves the right to amend the terms of the recruitment incentive at its discretion, providing one month’s notice.

6. GROWTH SHARE OPTIONS – MENTORSHIP OVERRIDE COMMISSION

When a Registered Individual attains Competent Adviser Status, they may be interested in supporting the Company’s Training & Competency Scheme. In this role, a Registered Individual will be responsible for assisting the Trainee Advisers in achieving the required competency statuses within a set timeframe and maintaining performance levels.

This override commission is calculated as 10% of the Annualised Premium Volume (APV) from each policy sold by the mentored “Registered Individual” from the core and extended Income Protection proposition, for the duration of their appointment with the Company. This includes all plans from Vitality Life, Cirencester, LV, Holloway Friendly, Aviva, and Royal London. Commissions from non-core insurance and any bonuses or incentives are excluded from this provision.

The override commission is payable on an indemnity basis and is subject to the same clawback provisions applicable to Initial Commission Credit. This means any lapsed policies will be deducted from the ongoing recruitment override commission payment or offset against commission payments. Payment of the recruitment override is contingent upon the “Registered Individual” remaining contracted to the Company. The recruitment override commission is paid to the introducing Registered Individual every month, on the 25th of each month for the period from the 1st to the 31st of the previous month, upon receipt of commission from product providers. The Company reserves the right to modify incentive terms at its discretion with one month’s notice.

7. INSURANCE REFERRAL TO WHOLE OF THE MARKET ADVISER

ProActivLife Ltd provides referral services to all our advisers for referring business to a Whole of the Market Adviser if a client does not qualify for Vitality Life products or requires specialist advice.

The commission payment for the whole of the market referrals varies with each provider and product recommended. Consequently, Financial Expert Independent Limited will pay out a 25% net commission for each product sold to a referred client. Payments are made on an indemnity basis, thus the claw-back liability provision applies to all long-term products using standard claw-back rules. It’s important to note that referral fees are paid only for new business. If a client is already a customer of Financial Expert, a referral fee will not be paid.

8. MORTGAGE REFERRAL

ProActivLife Ltd offers referral services to all our advisers for referring mortgage business to our partner, Best Brokers Ltd. Once a client arranges a mortgage or remortgage, the referring insurance adviser will receive a referral fee of £100 and will arrange full protection insurance for the client. The referral fee is paid by Best Brokers Ltd. All referred clients must be recorded in BIOS. The Company reserves the right to amend incentive terms at its discretion with one month’s notice.

9. WILL WRITING SERVICES

ProActivLife Ltd provides access to Will Writing Services through a partnership with Will Writing Network Limited. This service offers free basic Last Will services to all ProActivLife clients, by the Will Writing Network’s Terms and Conditions.

10. RETENTION ACCOUNT

ProActivLife Ltd believes commission retention is an effective method to mitigate the claw-back risk for Registered Individuals. Upon joining ProActivLife Ltd under 50:50 agency terms, we will not retain any commission unless your personal and financial circumstances present a higher risk.

Upon transitioning to full indemnity terms, a retention account will be established. A specified amount of commission will be allocated to a Registered Individual’s retention account. The retained commission belongs to the Registered Individual but is held in suspension for the Initial Risk Period. Once the Initial Risk Period concludes, the remaining balance will be repayable to the Registered Individual. The management of the retention account focuses on the total balance rather than individual policies.

11. PAYMENT FREQUENCY

The Company will pay the commission due to the “Registered Individual” every month, on the 20th of each month for the period from the 1st to the 31st of the previous month, upon receipt of commission from product providers.

The calculation will account for all received commissions, claw-backs, and any other costs associated with the “Registered Individual”. Summary statements detailing the credit calculation are prepared and sent to the Registered Individual on the 20th of each month.