AIG Whole Life Insurance
AIG Life is the new name for what was Ageas Protect (and previously Fortis) and its new pure protection whole of life plan is available to customers aged 17 to 84 and offers sums insured up to £20 million. Premiums are guaranteed and the plan pays out on death at any time or on terminal illness at any time. Customers also have access to the Best Doctors service. There is no surrender value at any time.
Customers can increase their cover by up to £5 million (if they are below age 90) if the government announces legislative changes to the rate of Inheritance Tax (IHT). Plans can be written in trust online and cover can be single or joint life (either first or second event).
Benefits can be linked to rises in the Retail Prices Index (RPI) up to 10% a year. Additional non-underwritten cover can be taken out up to age 71 on marriage/civil partnership; having a child; increasing a mortgage, and getting a salary increase. AIG Life says 90% of applicants can get an underwriting decision without any additional medical evidence from a GP being needed. Waiver of premium benefit is available, with a 26 week deferred period.
Comment: Whole of life plans have tended to become a bit niche in recent years – with the bulk of policies being low cost guaranteed acceptance funeral type plans. The rest are typically used for IHT or legacy planning. Indeed, most people, when they look for life cover, simply choose term insurance – which is cheaper, even if it is likely to run out before you do.
But whole of life still has a place and, if you think your cover needs may change in future but you don’t expect the need to ever fall away, then the whole life option can be the best long term bet. Of course, underwriting will be stricter, but AIG says 9 out of 10 applications avoid a delaying GP referral, while online apps and trusts make life easier for adviser and customer alike. We like the Best Doctors link too and the high maximum sum insured and, overall, AIG has come up with a simple plan that just does what it needs to.
Plus points: Conventional whole life cover with no surrender values so it falls under the ICOBS rulebook; Up to £20m cover available; 90% of applications are accepted without reference to the customer’s GP; Built-in Best Doctors service.
Not so plus points: No surrender value; No limited payment term; Whole life is less popular than (cheaper) term; RPI link, whereas an earnings link might be more appropriate (a criticism that can be most of most protection insurance policies, not just AIG); WOP has a six month deferred period, where a shorter term might be more appropriate for many (ditto).
Website: http://www.aig.com.
Rating (max 10): Innovation: 7. Overall: 8. Gold
Tags: Whole life; AIG Life