Partners Papers
We ’ ve got you covered !
The good news is :
Recently , you may have read or heard some stories about churn or replacement of life insurance policies . The concerns raised by the media are about advisers who , in order to earn new commissions for themselves , recommend to their existing or prospective clients that they should move their existing life insurance policies away from the company they are with to another one , even though that client would be better off keeping their existing policy and simply amending it as required .
We here at Partners Life agree wholeheartedly that a client should never be exposed to a worse outcome only because a
Why might a client be better off staying with their existing policy ?
Life insurance products and contracts do not work in the same way as other insurance or financial products . Life insurance companies have to guarantee that once you hold a life insurance policy , for as long as you keep that policy going , the terms and conditions of that policy cannot be altered in a negative way , even if your health deteriorates during that time . As soon as your policy goes into force , you have this guarantee .
Replacing that policy with one from another company breaks that guarantee . By cancelling the policy that has the existing long-standing guarantee and taking out a new one , the new life insurance company will automatically take into account any deterioration in your health arising during the life-time of your previous policy . Even if the new policy you are taking out has ‘ better ’ policy wordings , additional terms and conditions imposed as a result of health changes over the years can result in a substantially reduced ability to claim on that policy .
If you forget to tell the new company about anything that has changed in your health , or if the adviser doesn ’ t actually ask you about any changes in your health when completing the application for the new policy , then you could also be in for an unpleasant surprise at claim time . If , during the assessment of a claim , a life insurance company discovers additional information about your health which has not been disclosed at application time , they can then alter or cancel your policy altogether . Essentially , this could mean you will have cancelled guaranteed cover and replaced it with cover that doesn ’ t work at all . financial adviser wanted to make a financial gain from them . The good news is that we work very hard to ensure any clients moving their cover to Partners Life will be better off as a result of that decision .
Of course , what the media doesn ’ t say is , that there are a number of very valid reasons why an adviser might recommend a client move to another insurer , because the client would be better off by doing so , this means the adviser ’ s commission is a by-product of giving the client advice that is in their best interests .
So how can a customer tell the difference , you might ask ?
Sometimes the ‘ benefits ’ that you have been told will come from changing to a new policy are actually benefits that you already have in your existing policy . For example , we at Partners Life automatically apply any beneficial product upgrades to your policy , without you having to do a thing . In addition , some existing or older policies actually have unique benefits which are no longer offered by some newer products , meaning you could have a type of protection which cannot be replaced and will be lost forever if you cancel your existing policy .
From time to time you might need to reduce the premium you are paying to help when finances are stretched , and you might be told that you can get the same cover cheaper elsewhere . As with any type of product , cheaper doesn ’ t often mean better , and there is always a risk that the seemingly cheaper new policy actually has different benefits than the policy you already have . These might be lower claimable amounts , shorter payment terms , longer waiting periods , or even completely different benefits altogether meaning the reason they seem cheaper is that they provide significantly less , or significantly different cover . You are almost always able to amend your existing policy to achieve a more manageable premium , and of course by amending your existing policy you can retain your health guarantee rather than risking it on a new policy .
Why might a client be better off moving their existing policy ?
The most obvious reason that replacing an existing policy with a newer one could be beneficial to a client is where the new product provides more comprehensive coverage for a similar price and / or very similar coverage for more competitive pricing .
This can occur if the existing policy benefits have not been regularly upgraded by the insurer , leading to significant coverage gaps emerging between the existing policy and newer policies currently being offered in the market . It can also arise if the existing policy has become relatively expensive compared to the market .
Replacing a policy may also be beneficial where some or all of the existing benefits no longer meet the financial needs of the client . In many cases , the new benefits required to meet the client ’ s needs will be available through the existing life insurance company however these benefits may not always be competitive .
In these circumstances , a client may want the convenience of having all of your benefits in one policy ( e . g . one direct debit , one company to deal with for claims , servicing etc .) and as such might choose to move the entire policy rather than just to purchase the newly required benefits from an additional insurer . If the client believes their health has improved , but the existing product provider will not review existing premium loadings or exclusions , the adviser may also recommend a replacement product provider who is willing to offer the client better terms .
There are numerous other reasons why an adviser might also recommend replacing an existing policy which are for the benefit of their client – and there have been many clients who have significantly benefitted from that recommendation at claim time .
Confused ?
The key to understanding whether any replacement advice you receive is in your best interests is to ask the adviser to demonstrate :
● How they are going to protect your underwriting guarantee during the replacement process ; and
● Why they don ’ t believe you can achieve what you need to by amending your existing policy ; and
● What are the benefits in your existing policy that you will lose by moving to the replacement policy ; and
● What are the extra benefits you will obtain under the replaced policy that you don ’ t already have in your existing policy ?
If you have replaced an existing policy with your Partners Life policy , rest assured you did make the right decision in trusting us to care for you , your family , your business and the people who are most important to you . We work hard to make sure that our products are world class and we promise to continue to provide you with the most cost-effective insurance solutions available . As a valued Partners Life customer , you get much more than just insurance . You also get access to all of the following fantastic benefits :
Unique Claim Philosophy
We know that the most important time of an insurance policy is at claim time . Our philosophy of , “ If it ’ s grey we pay ” guarantees that where the medical information is unclear or conflicting , we will remove the uncertainty and simply pay your claim .
World-wide cover Your policy is valid no matter where you are in the world .*
Loyalty discount
As a way to thank you for partnering your family ’ s financial risks with us , we reward you through a compounding premium discount , which grows the longer you hold on to your insurance . The discount grows by 1 % per year from your 2nd policy anniversary , so after your 11th year , you will be receiving a 10 % discount on your entire policy .
Product upgrades
We have been working extremely hard to bring you the best insurance products at the best value . We regularly , retrospectively add new benefits to existing policies , enhancing your ability to claim and ensuring that your cover will continue to provide great value for life . We hope this gives you peace of mind in the knowledge we are looking after you .
Premium holidays
Life is filled with happiness and joy , but is not without its challenges . We realise that there are times and situations in life which can significantly hamper your ability to pay for insurance . This could be redundancy from employment , the passing of a loved one or perhaps even bankruptcy . If you find yourself in such a situation , we may be able to help you by providing you with a period of free cover .*
Policy suspension
There are many situations and life choices which may lead to a reduction in your need for cover , or ability to pay for cover . In these circumstances , you may be able to apply for a policy suspension - effectively ‘ pausing ’ your insurance coverage for up to a year without any impact on your acceptance terms . Examples include travelling overseas , going on maternity leave or heading back to study .*
Protection against changes in health
Your insurance is fully underwritten and guaranteed , meaning that any adverse changes in your health will not affect your current cover .
Increase options
Built-in to your insurance benefits are our Special Events Increase Benefit options . These are designed to provide flexibility in your cover , as your lifestyle changes , allowing you to increase your cover without an up-to-date medical assessment . You could qualify for this increase if you get a pay-rise , increase your mortgage , get married , have a baby , plus many more .
Innovation
We only hire the best minds in the industry . Our staff are constantly challenging the status-quo , using technology and extensive experience to maximise the value in each dollar of premium you are paying .
* Some exceptions may apply to the Business Protection Plan
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