We sat down with Elmarie Samuel, Senior Technical Marketing Specialist, at FMI, to gain a better understanding around why Future Insurability is such an essential ingredient to risk planning.
Q. Tell us a little about FMI’s philosophy around Future Insurability?
A. Your needs at the start of your life are not the same as when you reach retirement, and therefore your cover must be able to adapt according to your shifting needs throughout your life stages. The key for us at FMI, is that you must be able to adapt your cover, even if you’ve claimed or your health has changed.
That’s the essence of FMI’s future insurability options, which are built into FMI Individual benefits – what you see is what you get. For example, in the event of any major lifestyle change, such as marriage, divorce, childbirth, adoption, death of a spouse or the purchase of property, FMI’s Change in Circumstances option allows you to increase your cover by up to 25%. And you can do this even if you’ve had a claim.
Our Future Insurability options address 4 essential pillars to ensure your cover meets your needs throughout your life by having the option of 1) increasing your cover, 2) keeping your cover in place when times are tough, 3) extending your cover should you choose to work longer and 4) adjusting your cover as your life changes.
Q. Why is Future Insurability so important?
A. Even with the most well-thought-through plans and ambitions, nobody knows what’s around the corner. The joy of getting married, becoming a parent, buying a house and advancing in your career are all experiences that constitute life’s great moments. Then there are the absolute unpredictable lows of dealing with a critical illness, loss of income or even divorce. All these events require a shift in thinking, prompting individuals to reconsider their financial needs accordingly.
What’s more, a person who is just starting out, getting married or buying their first home has very different needs and risks to a person who has just become a grandparent, and whose priority is making sure they have sufficient savings in place for retirement.
That’s why you need flexible and tailored insurance solutions that can adapt through life’s ups and downs and through any life stage you may be in - with no restrictions, even if you’ve claimed or your health changes.
Q. What makes FMI’s Future Insurability different to others in the market?
A. FMI is the only provider that allows you to increase, decrease or add benefits to your policy in the future, without medical underwriting, even after you’ve claimed.
Q. How can Future Insurability help manage your finances during lockdown?
A. Future Insurability allows you to keep your cover in place when times are tough, without the need to complete a declaration of health or be underwritten. The following options are available despite health changes – even if you’ve claimed.
Grace period – You can keep your cover in place for up to 60 days after you’ve missed a premium payment. You can still submit a claim during this time, but your premium will need to be up to date before we can process a claim payment.
Reinstatement option – If affordability is a problem, you can reduce your cover and premiums on certain benefits. The cover can be increased back to the original amount on your next policy anniversary.
Freeze benefit - If we’ve received at least 12 premiums, you can freeze your policy for 3 or 6 months. You will not be able to claim during this period, however, your cover and premiums will be automatically reinstated at the end of the term, despite potential health changes. This option is allowed once in the lifetime of your cover.
To assist you during the COVID-19 pandemic and lockdown, we have included the following concessions to the Freeze benefit:
- You will be able to exercise this option if you’ve paid at least 3 premiums.
- We will allow more than one freeze, if you pay at least one premium after the freeze period has ended and before a new one commences.
- If you have been on cover for more than 12 months and you’ve used the Freeze benefit already, you may utilise it again.
Sabbatical option – If you have Temporary or Extended Income Protector, or Disability Lump Sum, you can keep this cover in place for up to a year if you are not working. During this time, your waiting period on the Temporary Income Protector will change to 90 days and if you have the Retrenchment Protector and / or Business Overhead Protector, they will be removed. The cover will be fully reinstated once you return to work.
Future insurability is an often overlooked part of a life insurance policy, but it’s an integral part of the product solution.