Sun Life Family Life Insurance
AXA’s Sun Life brand is now its direct to consumer (D2C) financial services provider (rebranded earlier this year), and this term with optional critical illness cover plan is taking proven D2C techniques to the under 60s market. The plan is underwritten by Scottish Friendly.
Family Life Insurance offers term insurance with terms up to 40 years, as long as the cover does not go beyond the customer’s 70th birthday. Minimum age is 18 and the maximum sum insured is £500K (reduced to £250K for ages 51-59).
The plan is medically underwritten online, and customers can get a quick quote within 60 seconds Sun Life says.
Single and joint life (first death) cover is available and customers can choose life cover only, or add critical illness insurance (CI) too. If they do, only three conditions are covered – cancer, heart attack and stroke and basic ABI definitions are used for cancer and stroke with the heart attach definition being ABI+. The CI sum insured is 25% of the full sum insured, with the remaining 75% payable on death.
Death from suicide is excluded in the first year of the plan.
Sun Life says most customers could get £100K of life cover for less than £15 a month. Adding CI would increase the cost however.
Comment: The general rule has been that protection insurance is sold not bought and that it needs advice as few potential customers understand it or indeed what their actual needs are and how they can best be fulfilled. However, in recent years, insurers (led by market leader Sun Life) have proved that D2C can work if you keep things simple. The downside is that minimal underwriting and very simple (over-simple?) cover is not really the best solution for most people. But, factor in the fact that most people don’t now buy life cover or have it sold to them and the case for a strong D2C market becomes stronger.
For advisers, if they do come across potential customers with D2C plans, the chances are they can come up with a better solution (for many if not all), keeping the existing plan in place until the painful and tedious underwriting process has been completed and the customer knows the actual price they will be charged and what cover they will actually get for their money.
Sun Life is already advertising this plan on television, and that should help raise the awareness of protection insurance so, if I were an IFA, I’d welcome this plan and encourage other providers to offer similar plans too!
Plus points: Simple to understand and buy basic life cover with optional CI; Offers D2C protection cover to those below age 60, using similar concepts to the proven guaranteed acceptance plans for over 50s; Supported by a big media campaign.
Not so plus points: An IFA should be able to get wider or cheaper cover (at least for those accepted on standard terms) but at the risk of greater uncertainty (until an underwriting decision is reached) and more time to go on risk; Very basic cover (only three CI conditions and only heart attack is an ABO+ definition) ; Little mention of trusts.
Website: http://www.sunlifedirect.co.uk.
Rating (max 10): Innovation: 7. Overall: 6. Bronze
Tags: Sun Life; Term