AIG Life Over Fifties Life Plan
AIG Life’s new Over Fifties Life Plan will transform the traditional direct to consumer offer into a mainstream adviser product, the insurer has said. It claims to be the first provider to offer an over 50s plan to all advisers, and a key focus has been to make protection easier to buy for their clients. Key features of the new plan include:
Protected Benefit – premiums cease at age 90, but if premiums have been paid for more than half of the specified term then a pro-rata amount of the sum insured is paid on death if the customer stops paying premiums early. AIG Life says this (effectively a paid-up plan option) is a big improvement on all other products of this type.
Inflation Option – benefits can increase by RPI each year (max 10% pa).
Funeral Pledge up to £10,000. This is an initiative by the Protection Distributors Group (PDG) to help bereaved families meet the funeral costs of their loved ones. AIG Life will pay the family's funeral director or home up to £10,000 (or the claim value if less than £10,000), in advance on all valid life insurance claims without waiting for probate. AIG Life’s pledge goes beyond the £5,000 payment the PDG agreed as a minimum.
Easy to write in trust – online, signature free and unique.
As with all AIG Life products, customers also get access to Best Doctors.
Comment: Over 50s life plans have become more popular in recent years as funeral costs have risen and people have a desire to leave a small legacy to their loved ones or to ensure the family are not left with outstanding debts. Until now though this type of plan has mainly been a product sold direct online, through magazine inserts and daytime TV marketing campaigns. Indeed, over 50s insurers arguably do more in the TV space than anyone to encourage protection insurance for ordinary people.
According to http://www.moneyadviceservice.co.uk, the average cost today of a burial using a funeral director is now £4,257, including collection and care of the deceased, a basic coffin, hearse and managing a simple service. For many elderly people they simply don’t have such sums in liquid cash or, even if they do, money issues such as this can become a growing worry in old age.
Over 50s plans have appealed to a growing sector and, if personal experience is anything to go by, many people take out such plans and do not even tell loved ones they have done so. Traditionally, underwritten life insurance scares many people (‘what do I do if they don’t want me or find out something bad about my health?’) and many policies become very poor value if you live to a really old age.
AIG Life gets round many of the problems with over 50s plans and, by targeting IFAs and brokers, it may open up the market still further. Yes, fully underwritten cover may still offer better value – but sometimes peace of mind and simplicity is worth paying a bit extra for.
Plus points: Over 50s cover to appeal to IFAs and brokers; Avoids many of the problems traditionally associated with such plans; Low cost, low benefits and simple; A broker can sell this plan and then encourage clients to switch to a better value fully underwritten plan only once that plan has been accepted, so avoiding issues with medical report delays and ratings; Such plans lend themselves to direct marketing campaigns by brokers.
Not so plus points: Traditionally, brokers don’t sell such cover – will this make them change their mind?; Fully underwritten cover with larger sums insured will still be a better option for many people.
Website: wwwaiglife.co.uk.
Rating (max 10): Innovation: 7.5. Overall: 7.5. Silver
Tags: WL; AIG Life