Where a client is paid a claim benefit on his or her policy and the policy structure includes either rider cover or linked cover (i.e. Flexi-linking, Split TPD, Split Income Protection) the client’s sum insured is reduced by the claim benefit amount paid.
George has two linked policies with $1 million Life Care and TPD (total and permanent disability) Cover and, $300,000 Trauma Cover.
Unfortunately, George is subsequently diagnosed with severe prostate cancer (i.e., classified with a Gleason score of 6) and is paid a full Trauma benefit of $300,000 to cover excess medical expenses, rehabilitation and time off work for his recovery. George’s sum insured is reduced as a result of the claim to $700,000 Life Care and TPD Cover and $0 Trauma Cover.