This one’s for the optimists out there. But do optimists even believe they’ll ever need life cover?

It’s called Renewable Premium pattern, and the description was taken directly from the product manual:

“Ideal for the individual who expects their income to grow significantly over the period until the premium review date, but have cash flow constraints now.”

So this is how it works.

The life insurer offers a fifteen year level premium guarantee upfront. In other words, your premium remains level from year to year for the first fifteen years. After these fifteen years end, the insurer then reviews the premium based on your current age (in other words, you’re now fifteen years older at review stage) as well as on the level of cover you have.

The new premium will be set at a level to maintain the level of cover for a further five years.
Should you accept this new premium they will then offer you a further five year guarantee. Hence the name Renewable Premium.
Should you not accept this increase in premium then your cover will be reduced to an affordable level.

Who is the perfect candidate for this type of premium pattern?

  • Well I’d guess anyone who only requires life cover for short periods of time.
  • Another example would be businesses wanting to fund buy and sell arrangements.

Who isn’t a good candidate for this premium pattern?

Anyone with a long term perspective…

I’m sorry, call me a skeptic if you must, but when you’re 85 years old the potential premium increases must be staggering!

And did you notice there’s no mention of any limits being set for this potential increase?

Would I buy insurance using this finance option?

I’d be nervous. It all sounds a little wishy washy to me…although it’s a good company standing behind this option, and I don’t for a moment believe their intention is to mislead you.

Interested in having a renewable premium quotation prepared for you? Why not click here?

If you would like further information, submit your details below & we will contact you.