Latest Poll – Life Policy Cancellations?

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Is your advice practice experiencing a higher rate of life insurance policy cancellations over the past 12 months?

Our latest poll is asking you to consider whether cost-of-living pressures and higher premiums mean your advice practice experienced a higher rate of life insurance policy cancellations over the past 12 months?

Our question follows recent commentary that points to cost-of-living pressures and higher premiums, coupled with demographic and health changes, leading many Australians to re-evaluate their life insurance.

Policy co-ownership firm iExtend states more policyholders are wavering on whether to keep their life cover and highlights factors it believes are driving life insurance cancellations (see: Seven Factors Driving Life Insurance Cancellations).

The company’s CEO, David Sarkis, citing data from CALI, says 68% of Australians are worried about paying for life insurance. In comparison, 23% of policyholders would consider cancelling their life cover if affordability became an issue.

Our poll is now open and we’re keen to learn your thoughts…



1 COMMENT

  1. My answer is NO

    But frankly this is a bit of a silly poll. Yes our friends the insurers are gouging existing legacy products and yes new policyholders are being kicked in the teeth when Duration Based Pricing claws back the 25% upfront discount.

    But the biggest factor in cancellations is how the policy was sold. Those Advisers who spelt out that a stepped premium would increase every year particularly when the insured reaches certain age points. If the policy was sold with Duration Base Pricing discounts, was this fully explain to the client?.

    Advisers should be utilising the same techniques when pre-empting an exclusion or loading when it's obvious that such an underwriting outcome is inevitable. A client pre-informed is less likely to pull the plug, unless financial disaster has occurred, like loss of a job.

    But we all know that the most important thing is the the quality of therelationship between adviser and client. If it's transactional, as in "wham bam thank you mam" then the chance of surviving the latest gouge from our friends the insurers is pretty low. In any event most clients need regular reinforcement of what they did, and why they did it.

    Some advisers might believe that by recommending premiums in super be paid by rollover from accumulation protects them somewhat from lapses. That strategy always runs the risk that our friends the industry superfunds, who hate the concept of rollovers paying somebody else's premiums, significantly reduce FUM and the costs cannot be fully recovered by a simple buy-sell charge.

    I predicted that would happen in 2022 with the Albenese prime ministership, but it hasn't happened yet. But a second term government is always prepared to take on and annoy more people

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