Risk specialist dealer group Synchron and AIA Australia have released initial details of a new fixed term option for lump sum life insurance products, to be called fixed term level.
Announced at a media briefing earlier this week, Synchron Director Don Trapnell said the intention of the new product range was to offer consumers fixed level premiums for lump sum policies that can change over time to better reflect their life stage and situation. Importantly, Trapnell also noted the insured client will enjoy guaranteed renewability, meaning they can continue to other product options after the expiry of their fixed term without any additional underwriting.
… the insured client will enjoy guaranteed renewability
Trapnell noted the motivation behind this initiative lay in addressing the issue within the Australian life insurance market, where many lump sum life contracts have been cancelled by the time the insured life has reached the time of life at which claimable events are likely to occur.
From the life company perspective, AIA Australia’s Senior Manager Retail Product Strategy, Steven Baxter, said the new product was intended to give Australians. Once the product is released, Baxter said clients will be offered fixed term level premiums that complement current stepped and level options,” Mr Baxter said. “This means advisers will be able to better align the products to meet the specific needs of individual clients.”
Echoing Baxter’s comment, Trapnell raised the concept of ‘smoothing’ or ‘shaping’ Australian life insurance products around the life cycle of the client, which would contribute to greater affordability. He cited an example that included a client taking a higher sum insured level when his/her children were at school age, possibly reducing cover over time and making other adjustments to reflect increasing age and/or changing lifestyle and circumstances.
Neither Trapnell nor Baxter were able to confirm a release date for this new product option, but indicated they were seeking a 2016 release date target.
In closing, Trapnell also emphasised that Synchron was not seeking exclusivity in accessing this product via AIA Australia.
Which other dealer groups have taken such an initiative? It’s been needed for years but no one has put forward a similar product innovation concept. Well done, Synchron.
Incidentally, I came into the business when permanent insurance was the go. At least then you had the opportunity to purchase level premium insurance until age 85 or 95 – that was all you could get. Nothing has changed there so why can’t we still purchase level term, level premium life policies now?
I agree 100% with you ,should have never taken these products off the market hopefully it was for the right reason that is in the client best interest not the manufacturer.
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