Often, insurance is obtained with the ‘now’ in mind with the mindset of making policy changes in the future as required. Depending on the changes, clients may need to undergo further underwriting for any additional cover. But what if your clients had the chance to future proof their options going forward, planning for change, and eliminating any future underwriting needs?
Life isn’t straightforward – plans change!
AIA’s Forward Underwriting benefit
AIA’s Forward Underwriting benefit (FUB) is the perfect option for your clients who want to plan ahead. AIA’s optional FUB allows your clients to use the state of their health at the time of their initial application to secure an option to buy new or additional cover in the future when a FUB ‘event’ occurs.
It's a cost-effective way to give your clients more options to increase cover in the future when it’s needed, and best of all, clients aren’t required to be medically underwritten at the time of exercising the FUB. Terms and Conditions, limitations and exclusions apply, please refer to the Priority Protection Product Disclosure Statement for full details.
What are the FUB 'events'?
Let’s consider the example of Sarah, a 35 year old bank manager, who in January 2015 decides to take out Life cover for $1 million and FUB option of $1 million.
Later that year in July 2015, Sarah sees her circumstances begin to change. She gets married and exercises the FUB option to buy TPD cover for $250,000. Sarah now has $1 million in Life cover and $250,000 in TPD cover.
Fast forward to January 2016 to the next step in their future, when they buy a house. Sarah exercises her FUB option and increases her Life cover to $1.3 million. Her insurance policy now consists of Life cover of $1.3 million, TPD cover of $250,000 and a FUB balance of $450,000.
Almost two years later in December 2017, Sarah and her husband welcomed their first child. With their family dynamic changing, Sarah exercises her FUB option of $250,000 to buy a Crisis Recovery benefit. Sarah now has $1.3 million of Life cover, $250,000 of TPD cover, $250,000 of Crisis Recovery cover with a FUB balance of $200,000 still to be utilised in the future.
As Sarah’s circumstances changed, she was able to utilise FUB to tailor her insurance policy to fit within her circumstances at a particular time, giving her peace of mind that she is adequately covered.
This case study is for illustrative purposes only. Consider the appropriateness of the information and view the relevant Product Disclosure Statement.
If you would like more information on AIA’s Forward Underwriting benefit and how it could help your personal and business clients, please contact your AIA Australia Client Development Manager or State Office.