How Safe Is Your Life Risk Insurance Provider Anyway?
This special report was put together in the wake of AIG in the America coming under the international spotlight. It is important to realise that AIG Life New Zealand (American International Assurance (NZ) is financially safe at the time of writing this report.
This special report is designed to give you a better understanding on how
life risk type policies work. The type of cover I am referring to is; death
cover,critical illness cover, disability income cover, and medical insurance
cover.
This special report was put together in the wake of AIG in the America coming under the international spotlight. It is important to realise that AIG Life New Zealand (American International Assurance (NZ) is financially safe at the time of writing this report.
This special report is designed to give you a better understanding on how
life risk type policies work. The type of cover I am referring to is; death
cover,critical illness cover, disability income cover, and medical insurance
cover.
Question 1
I have an existing cover in place, will I loose this cover if the company
I am insured with goes out of business?
No is the short answer. In the past we've seen many insurance businesses
change ownership, and a your plan will have a guarantee of renewal of the
plan until a certain date. The minimum period of such contracts is 5 years,
but yours is likely to last longer than that. Cover remains in place as long as
you pay the premium within that guaranteed period.
I have an existing cover in place, will I loose this cover if the company
I am insured with goes out of business?
No is the short answer. In the past we've seen many insurance businesses
change ownership, and a your plan will have a guarantee of renewal of the
plan until a certain date. The minimum period of such contracts is 5 years,
but yours is likely to last longer than that. Cover remains in place as long as
you pay the premium within that guaranteed period.
Questions 2
If I keep paying an existing policy right now will I lose the premiums?
No. The only way you can 'lose' the benefit of the premiums is if you make the mistake of allowing your policy to lapse. You will then lose the value of your
policy being a 'guaranteed renewal' contract.
No. The only way you can 'lose' the benefit of the premiums is if you make the mistake of allowing your policy to lapse. You will then lose the value of your
policy being a 'guaranteed renewal' contract.
This would be a very dangerous thing to do as you may be unable to apply for
insurance later if you develop a health problem in the meantime or if your health
is not as good as when you took out the policy.
Your existing company would need to fail outright, and the New Zealand and
Australian market is very unlikely to let any insurance company go. They are
Australian market is very unlikely to let any insurance company go. They are
much more likely to take the policies over.
Question 3
What if I happen to be in the middle of a claim? Will I lose the
ability to continue on with that?
All of the life insurers in New Zealand I recommend my clients deal with use
reinsurance. This is insurance for the insurance company. Part of the cost of
your claim is paid by another company to you insurer, and then passed on to
you as a claim payment.
What if I happen to be in the middle of a claim? Will I lose the
ability to continue on with that?
All of the life insurers in New Zealand I recommend my clients deal with use
reinsurance. This is insurance for the insurance company. Part of the cost of
your claim is paid by another company to you insurer, and then passed on to
you as a claim payment.
The companies I recommend are also established operators in Australia as well. They are big companies that have vast experience. They have solid credit ratings
and are easily sold to another insurance company.
Even AIG Life in New Zealand still has an A+ credit rating from Standard and Poors* as at Tuesday, 17th September, 2008. Its parent company has had some issues but its parent company is not directly funding claims in New Zealand. The contracts made in New Zealand are funded by insurance and reinsurance funds arranged in New Zealand. (*Standard and Poors A+ negative outlook).
and are easily sold to another insurance company.
Even AIG Life in New Zealand still has an A+ credit rating from Standard and Poors* as at Tuesday, 17th September, 2008. Its parent company has had some issues but its parent company is not directly funding claims in New Zealand. The contracts made in New Zealand are funded by insurance and reinsurance funds arranged in New Zealand. (*Standard and Poors A+ negative outlook).
Question 4
If another insurance company takes over my policy can they change
the terms I currently have?
NO - they are bound by the terms of the existing contract, including your current acceptance terms. Some contracts even have guaranteed premium rates for their
life insurance. Otherwise they can change the premiums if they wish to. When Colonial was bought by prudential and soon after by Sovereign which is owned by ASB Group, nearly all of the insurance contracts, bar a few Colonial contracts were kept the same, and premiums have not altered much.
If you have any questions about your Life Risk Insurance, or want to know about a Life Risk Limited Lifestyle Check, please call Neil Smith on 027 489 6141 today.
A disclosure statement is available, upon request and free of charge.
If another insurance company takes over my policy can they change
the terms I currently have?
NO - they are bound by the terms of the existing contract, including your current acceptance terms. Some contracts even have guaranteed premium rates for their
life insurance. Otherwise they can change the premiums if they wish to. When Colonial was bought by prudential and soon after by Sovereign which is owned by ASB Group, nearly all of the insurance contracts, bar a few Colonial contracts were kept the same, and premiums have not altered much.
If you have any questions about your Life Risk Insurance, or want to know about a Life Risk Limited Lifestyle Check, please call Neil Smith on 027 489 6141 today.
A disclosure statement is available, upon request and free of charge.
