For financial adviser use only. Not approved for use with customers.

Build your business with equity releaseYou should read this along with our

interest rate and tariff of charges leaflets.

With the biggest generation in history now reaching retirement, often with small pension funds, equity release is becoming an increasingly popular option for funding long years of retirement.

A growing marketAlthough house prices are not growing as fast as they once were, over the last 10 years people have still seen a significant rise in the value of their property.

The baby boom generation has much of their wealth tied up in bricks and mortar. This is leading to tens of thousands of people looking at generating cash by unlocking some of the money tied up in their property. So, for advisers looking to grow their business, equity release is a significant opportunity.

Getting started with equity releaseBefore you can begin to decide if writing equity release business is right for you, it is essential to understand the products and the market.

There are two types of equity release products:

During 2011, the equity release market wrote £789 million of business.

Build your business with equity release

Lifetime mortgagel The client takes out a loan secured on their property.

l The loan and the interest it accrues will be repaid when the property is sold after the client dies or moves into long-term care.

l The client continues to own their home.

Home reversion planl Your client sells part or all of their property to the home reversion plan provider.

l When the client dies or moves into long-term care, the home reversion plan provider sells the house, keeps their share of the proceeds and passes the remainder, if any, to the client or their estate.

l Your client can remain in the property for the rest of their life, but no longer owns it.

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Aviva only sells lifetime mortgage products.

This booklet is to help you get to grips with all the essentials of equity release. Once you’ve done that, with Aviva’s support, you can take advantage of the growing opportunities within this market.

Open up more business opportunitiesEquity release is designed to allow older people to turn part of the value of their homes into usable cash.

Put simply, equity release is a way for clients to release some cash from their home without having to move.

Becoming an authorised equity release adviser will open up a lot of opportunities for you. Adding equity release to the products you’re authorised to sell means you can offer your clients a full financial planning overview.

As we’ve mentioned, the potential audience for equity release is massive. Despite the recent decline in house prices, a significant number of homeowners still intend to use their property to supplement their retirement income in the future. Indeed, 25% of homeowners are willing to consider releasing equity from their home1, so you’d be opening up your business to many more clients.

1 MINTEL, Equity Release Schemes, May 2012.

Let us help you build your businessAt Aviva, we’ve been selling equity release since 1998. Since then, we’ve helped over 120,000 people release more than £4.1 billion from the equity tied up in their homes.

More than that, we’re serious about helping you develop your business and opening up new opportunities.

We have a team of specialists to offer you help and advice as you establish yourself as an equity release adviser. We’ll be there to support you every step of the way. We also value your feedback on our service, products and the support we give you, so please feel free to get in touch with us at any time.

Our aim is for you to be as comfortable and confident as possible in adding equity release to your portfolio of products.

Peace of mind for you and your clientAs one of the leading providers of equity release, we’re proud to be a member of the Equity Release Council, formerly known as SHIP.

Set up in 1991, the Equity Release Council is a voluntary organisation that works to promote equity release products. The Equity Release Council’s main aims are to:

l protect the consumer through their code of conduct.

l increase education, awareness and understanding of the safeguards in place and of how equity release works.

To make sure that customers are protected, the Equity Release Council has a code of conduct that all its members must follow.

We’re staunch supporters of the Equity Release Council and their determination to protect people taking out equity release plans.

As we’re members of the Equity Release Council, we follow the code of conduct, which means you can recommend our products with confidence. Your clients can also have peace of mind that they’re dealing with a reputable and trustworthy company.

Many potential customers have heard about the Equity Release Council, so it’s worth finding out more about it as an organisation and the protection its membership gives your client. You can find out more at their website: www.equityreleasecouncil.com

The Code of Conduct:1. allow customers to remain in their property for life provided

the property remains their main residence;

2. provide customers with fair, simple and complete presentations of their plans. This means that the benefits and limitations of the product together with any obligations on the part of the customer are clearly set out in their literature. It should include all costs that the customer has to bear in setting up the plan as well as the tax implications, their position on moving house and the effects of changes in house values on their loan;

3. allow customers the right to move their plan to another suitable property without any financial penalty

4. give customers the right to an independent solicitor of their own choice to conduct their legal work. The firm must provide the solicitor with full details of the benefits their client will receive prior to the completion of the plan. The solicitor only signs a certificate once he or she is satisfied that their client fully understands the risks and benefits of the plan.

5. provide an Equity Release Council certificate, signed by the solicitor, to ensure clients are aware of the terms and implications of the plan including the impact of equity release on their estate

6. give customers a no negative equity guarantee on all equity release plans. This means customers will never owe more than the value of their home and no debt will ever be left to the estate.

This Code of Conduct offers peace of mind to the consumer, who can use Equity Release Council approved equity release products in confidence, knowing that they will be able to remain in their own home for the rest of their lives or until they enter long-term care. They can be sure that they will never leave a debt to their family as all Equity Release Council members who provide equity release products give consumers a no negative equity guarantee, meaning that no matter what happens to the housing market, they will never owe more than the value of their home. The Equity Release Council also insists its members ensure that any customer buying an equity release plan has received advice from a fully qualified adviser who has gone through a full advice process.

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At Aviva, we offer two lifetime mortgages.

Here’s a quick overview of our two lifetime mortgage plans:

Key facts about an Aviva lifetime mortgagel It’s a loan secured on a property.

l It’s a long-term commitment, so your client may face early repayment charges if they pay it off before they die or need to go in to long term care. If an early repayment charge is payable, this could be up to 25% of the initial loan.

l The loan attracts compound interest, so the amount your client owes adds up quickly.

l The loan and accrued interest is usually repaid by the sale of your client’s property when they die or move into long-term care (as defined in our terms and conditions).

l It offers a no negative equity guarantee, so neither your client nor their estate will ever repay more than the amount the property is sold for, so long as the property is sold for the best price reasonably obtainable.

l It will reduce the inheritance your client can leave behind, possibly to nothing.

l Your client can add an inheritance guarantee to their lifetime mortgage to safeguard a percentage of the sale price for their beneficiaries. This will reduce the amount that can be borrowed.

l It may affect your client’s tax position and entitlement to welfare benefits.

Lifetime mortgages from Aviva

Lifestyle Lump Sum Maxl Clients can borrow a cash sum from

£15,000 provided the property meets our lending criteria.

l Offers a fixed interest rate.

l No monthly repayments.

l Clients can transfer the lifetime mortgage to another property provided it meets our lending criteria.

l Clients who have certain medical conditions or lifestyle factors that affect their health may be eligible for an enhanced LTV scale, allowing them to borrow more.

l Your client may be able to borrow more at a later date. We would treat this as a new application for additional borrowing and can’t guarantee that we’ll accept it. It would depend on our lending criteria at the time.

Lifestyle Flexible Optionl Clients can take an initial loan and set up a cash reserve to borrow from later.

l The minimum cash reserve clients can take is £15,000, taking £10,000 as an initial loan and setting up a reserve of £5,000.

l There is a fixed interest rate on the initial loan.

l Clients only pay interest on the money they borrow when they receive it.

l The interest rates for later cash releases may be different to that on the initial loan. They are also fixed for the length of the loan.

l No revaluation fee for later cash releases from the cash reserve your client sets up at the start of the lifetime mortgage.

l No monthly repayments.

l Clients can transfer the lifetime mortgage to another property provided it meets our lending criteria.

l Your client may be able to borrow more once they use up their reserve. We would treat this as a new application for additional borrowing and can’t guarantee that we’ll accept it. It would depend on our lending criteria at that time.

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Equity release is designed specifically to allow older people to access the cash tied up in what is often their biggest asset – their home.

We’re very conscious that we need to reassure and protect these customers, so we offer two guarantees on our lifetime mortgages. One of these guarantees is automatic and the other is optional.

No negative equity guaranteeEvery client taking out a lifetime mortgage with Aviva will receive our no negative equity guarantee.

With this guarantee, neither your client nor their estate will ever have to pay back more than the amount their property is sold for. As long as the property is sold for the best price reasonably obtainable, we’ll never ask for any more money even if the amount owed is more than the sale price.

This means that your client’s estate won’t be left with any debt from the lifetime mortgage.

Inheritance guaranteeA lifetime mortgage will always reduce the amount of inheritance your client can leave.

Your client can make sure that they leave some money behind for their beneficiaries by taking out an inheritance guarantee at the start of their lifetime mortgage.

With the inheritance guarantee, your client specifies a percentage that they want to go to their estate. That means that your client or their estate will get a share of the sale price as long as the home is sold:

l when your client dies or goes into long-term care

l at the best price reasonably obtainable.

Adding an inheritance guarantee will reduce the amount your client can borrow. This is because we calculate their maximum loan on the value of the property which isn’t covered by the guarantee. For example, if their home is worth £150,000 and they want to guarantee 20% of the value, we’ll calculate the maximum loan on a value of £120,000.

Because it affects the amount they can borrow, your client can only add an inheritance guarantee when they first take out their lifetime mortgage. They can’t add it later on. However, your client can reduce or remove the guarantee if they want to:

l borrow more, or

l reduce the amount they may have to repay if they are moving or adding someone to the lifetime mortgage.

An inheritance guarantee may also affect the interest rate your client gets on the loan. You can find out more about our current interest rates in our interest rate flyer.

Guarantees from Aviva

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Lifestyle Lump Sum Max v Lifestyle Flexible OptionHere’s how the two products compare in detail:

Criteria Lifestyle Lump Sum Max Lifestyle Flexible OptionAge

eligibility

l Available from age 55.

l No maximum age.

l Available from age 55.

l No maximum age.

Interest l We guarantee the interest rate for 14 weeks from the date we receive a fully completed application form.

l The interest rate is fixed for the term of the loan.

l We calculate interest daily and compound it annually.

l Please see our interest rate flyer for our current rates.

l We guarantee the interest rate for 14 weeks from the date we receive a fully completed application form.

l The interest rate is fixed for the term of the loan.

l For each individual cash release, we’ll apply the interest rate current on the day of the request. We’ll guarantee this rate for 14 days.

l We calculate interest daily and compound it annually.

l Please see our interest rate flyer for our current rates.

Guarantees l No negative equity guarantee This means neither your client nor their estate will ever have to pay back more than the amount the property is sold for, provided this is the best price reasonably obtainable.

l Inheritance guarantee Your client can safeguard a percentage of the sale price of the house to go to their estate when the property is sold after their death. It must be sold for the best price reasonably obtainable.

l An inheritance guarantee will reduce the amount they can borrow and may affect the interest rate they get.

Amount released

l The minimum loan is £15,000.

l Please get in touch with us if your client wants to borrow more than £600,000.

l Maximum loan to value could be up to 51% of the value of the property. This depends on your client’s age and the maximum loan amount.

l Your client may be able to borrow more if they have a certain medical condition or lifestyle factor that affects their health. The maximum loan to value could be up to 55% of the value of the property. This will depend on the client’s age.

l The minimum total reserve is £15,000. Your client must take at least £10,000 of this as the initial loan.

l From the total reserve, your client can take between £10,000 and 100% as an initial loan and set up a cash reserve for later. The most they can leave in the cash reserve is 50% of the maximum amount they can borrow. We won’t let a client set up a cash reserve with less than £5,000.

l The minimum amount your client can release from the cash reserve at any one time is £5,000. If the unused reserve is less than this amount, the next release they take must be for the full amount left in the reserve.

l Maximum loan to value could be up to 45% of the value of the property. This depends on your client’s age and the maximum loan amount.

l Please get in touch with us if your client wants to borrow more than £600,000.

Property criteria

l Property must be in England, Scotland, Wales or Northern Ireland.

l We don’t offer lifetime mortgages for property in the Channel Islands or the Isle of Man.

l Minimum property value is £75,000.

l There is no maximum property value.

l For flats and maisonettes, we’ll base our calculations on 85% of the value of the property.

l For full details on property criteria please see our ‘Guide to acceptable properties’ brochure.

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Criteria Lifestyle Lump Sum Max Lifestyle Flexible OptionOwnership l Your client continues to own their home.

l The loan is secured against the property.l Your client can transfer the lifetime mortgage to another property provided it meets our lending criteria.l No monthly repayments.l The loan is repayable when your client dies or moves permanently into long-term care. In joint cases, the loan is

repayable on the death or long-term care of the second borrower.

Cash reserve

l There is no cash reserve for the Lifestyle Lump Sum Max.

l We set the reserve when your client first takes out the lifetime mortgage.

l The most your client can put in their reserve when we set it up is 50% of the maximum amount they can borrow.

l We base our calculations on the client’s age and the value of the property at that time.

l The cash reserve is open ended, so your client can access the money at any time.

l We may stop their access to the cash reserve in certain exceptional circumstances. Please read the terms and conditions for more information about this.

l The minimum release is £5000.l There is no maximum release as long as there are

sufficient funds left in the reserve.l Your client can take as many releases as they like

provided there are sufficient funds in the reserve.

Additional borrowing

l Your client may be able to apply to borrow more in the future. l We don’t guarantee this. It will depend on our lending criteria at that time.l Your client will have to pay extra charges for any additional borrowing. Please see our tariff of charges leaflet

for more information about this.

Charges for the original

plan

l Arrangement fee - £550. This includes our standard legal fees. Your client may have to pay additional legal fees.l Re-booking fee (optional) - £195l Valuation fee – depends on your client’s estimation of the value of their propertyl Your client must pay legal fees, including any money paid out by legal advisers and charges for extra legal services.l Re-inspection fee – this will only be necessary where the valuer needs to re-inspect the property, for example,

if your client had to carry out essential repairs.l You can find more information about fees in our tariff of charges leaflet.

Additional borrowing

charges

l Application fee - £75. l Re-booking fee (optional) - £145l Property revaluation fee – depends on your client’s estimation of the value of their propertyl Re-inspection fee – this will only be necessary where the valuer needs to re-inspect the property, for example,

if your client had to carry out essential repairs.l You can find more information about fees in our tariff of charges leaflet.

Regulation l Fully regulated by the Financial Services Authority.l Member of the Equity Release Council.

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Getting to know your customers

You need to take a look at your client base before deciding whether to become a qualified equity release adviser.

Equity release is only suitable for people aged 55 and over. So, if you have a number of clients who are retired or approaching retirement, you already have a pool of people who may be interested in unlocking cash from their home.

As your potential clients could be any age from 55 upwards, you’re actually looking at a very diverse target audience. For cultural, emotional and financial reasons, many of these people will have very different outlooks on life and, of course, different financial needs.

Using equity release cashRecent research shows many people consider equity release a sensible and legitimate part of financial planning. Here’s how existing equity release customers have used the cash they’ve unlocked:

57% Home/garden improvements32% Pay off unsecured debts30% Pay for a holiday23% Treat/help family and friends16% Clear outstanding mortgage16% Pay their regular bills

Source: MINTEL, Equity Release Finance Intelligence May 2012.

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Mr and Mrs HarmanMr and Mrs Harman live in a semi-detached house in the Midlands, which has been their home for the last 30 years. They have no mortgage on their home and it is now worth just over £200,000. Both Mr and Mrs Harman are in their late 60s and lead an active and full life.

Mr Harman has a small pension from his employer. Both of them get a state pension. They are finding it more and more difficult to get by on their income. They’d also like to be able to do more to support their children and their growing number of grandchildren financially.

Miss JamesMiss James is a retired head teacher who lives alone in a small Wiltshire village. She doesn’t have any children. Miss James spent her life working in the education system, so she has a generous superannuation pension. In addition, her cottage is now worth over £400,000 and she has no outstanding mortgage.

Miss James wants to make some home improvements, but has already spent her life savings, so she needs to find a cash lump sum to carry out the work on her home.

Mr McGarrettMr McGarrett is a semi-retired pilot. He’s divorced with two grown-up children. For the last 20 years, Mr McGarrett has lived in a three-bedroom flat in West London. He paid his mortgage off three years ago, so he now owns the flat completely.

Mr McGarrett has a generous pension, but also has an expensive lifestyle, which he doesn’t want to give up. However, he’s finding it increasingly difficult to finance his current way of life. He needs a significant injection of cash to continue living in the style to which he’s become accustomed.

Mr and Mrs ArmitageMr and Mrs Armitage live in a three-bedroomed detached house in Yorkshire. They don’t have any children. They both have a private pension and a state pension, that covers their daily expenditure, but don’t have much left over.

Mrs Armitage’s brother lives in Australia. The couple want to visit him and his family and then spend some time travelling round the country. They need to free up some cash to allow them to do this.

Here are some fictional examples of different types of potential equity release customers:

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If you’re thinking about expanding your business into equity release, you should take a close look at your existing customer base. You may already have a number of clients who may be suitable candidates for equity release. They may include people who:

l have low retirement incomes from pension and savings products

l have personal debts with no other means of repaying them

l want a cash lump sum for a specific purpose, such as home improvements or taking the trip of a lifetime.

Get the word outSome of your clients may have family or friends who might benefit from equity release. You may live in an area with a particularly high percentage of retired people.

One of the best ways to get the concept of equity release out to a larger number of people is to hold a seminar or presentation on the subject. That would give potential clients the opportunity to find out more about equity release and what it could mean for them.

You don’t have to do this alone. You can get together with a group of other professionals, such as accountants and solicitors, who could also benefit from the extra business that equity release could bring. That would also mean that you could share the costs of staging the event.

Starting a conversation about equity releaseEquity release isn’t right for everyone, but it should be an option for your clients to consider if they find themselves needing cash in certain circumstances.

With some clients, you’ll find it appropriate to talk about the need for extra funds during their retirement. Equity release could be suitable for someone in that situation. As ever, it’s up to you to present your client with all their options and advise them on the best options for them.

Be proactiveThere are a number of instances that may trigger more proactive conversations about equity release with your clients. Here are a couple of examples:

Annual fact find or reviewDuring a client’s annual review, you’ll be able to talk through all aspects of their financial circumstances. During this annual review, you may want to check their:

l Income and outgoings, including benefits

l Personal debt

l Any current financial burdens

l Any changes in the value of their portfolio

Each of these could potentially trigger a need for equity release and are useful ways to begin a discussion with your client.

Lifestyle changesWith people living longer than ever before, retirement no longer means an average of 10 years spent at leisure. Many people will enjoy a retirement that lasts 15 – 20 years.

This can mean their personal circumstances change considerably during this time. So many things could happen, such as the death of a loved one; separation, divorce or marriage; the birth of grandchildren; sickness and health issues.

Each of these can mean a change in financial circumstances, opening up the possibility that equity release might be a suitable option.

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Three ways to find out more about equity release

1 Contact your usual Aviva consultant

2 Call the Equity Release Team at Advisers Connect on 0845 300 2837

3 Visit aviva.co.uk/equity-release.

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PF 04 186 06/2013 © Aviva plc

Aviva Equity Release UK Limited.

Registered in England No 3286484. 2 Rougier Street, York, YO90 1UU.

Authorised and regulated by the Financial Conduct Authority. Firm Reference Number 310433.

aviva.co.uk