What's New - AIG Life with Forward Underwriting Option Review

Review - AIG Life with Forward Underwriting Option

Product launched Dec 2008. Review published 26 Feb 2009. Please read our disclaimer.

AIG’s Forward Underwriting Option might be described as a way to future proof your life, total disability and crisis recovery insurance needs.

The Forward Underwriting Benefit can allow you to use your assessed good health now to secure the option to buy cover in the future with no further medical examinations or questionnaires required, protecting against possible health changes down the track. Benefits include Life Cover, Total Permanent Disablement and Crisis Recovery.

Available as an option with AIG Life Priority Protection policies, Forward Underwriting offers the flexibility to alter your insurance cover in line with your life stages, such as marriage, children, mortgage or starting a new business.

You can select any amount between $100,000 and $10 million of Forward Underwriting Cover. This limit is restricted to standard policy conditions and some benefits are subject to maximum amounts.

WHO DOES THIS SUIT?

This benefit option suits anyone who is looking ahead to lifestyle goals which usually mean an increased need for life, disability and crisis recovery insurance cover over time. AIG Life’s Forward Underwriting Option makes buying or increasing future cover more streamlined, offering policy holders and their families a further level of protection as their needs evolve.

USEFUL LINKS

HOW DOES IT WORK?

When taking out one of AIG Life’s Protection policies (which must be through a licensed financial planner), a Forward Underwriting option can also be included. This allows you to lock in your future requirements for Life Cover, Total Permanent Disablement and Crisis Recovery.

Clients are eligible to exercise the option to buy new cover without further medicals when a trigger event occurs. This could be what is known as a ‘business’ event, ‘personal’ event, or ‘other’ event. The amount of Forward Underwriting Cover that can be exercised depends on the type of event that occurs and is limited to an amount of up to 50% for business events and up to 25% for personal events. Full details are outlined in the PDS.

A business event can be triggered as a result of starting a new business, increasing personal liability for business debts or increasing shareholding or value in the business.

A personal event includes marriage, permanent separation, mortgage, new child, child’s education costs, and a child born with Spina Bifida or Cerebral Palsy.

Last of all, every third benefit year is termed an ‘other’ event.

When an option event occurs, say, a single man decides to take the plunge and marry the love of his life, he could obtain additional insurance of up to 25% of the original selected Forward Underwriting amount. He would then have 60 days to apply for cover by contacting his financial planner.

FEATURES & INNOVATIONS

It allows tailoring of Life, Total Permanent Disablement and Crisis Recovery insurance benefits in future with no requirement for further medical examinations or questionnaires.
This benefit allows for the possibility to claim twice for the same event before an exclusion is applied.
Up to $10 million cover is available for Life, Total Permanent Disablement and Crisis Recovery.
Total Permanent Disablement cover capped at $3 million.
Crisis Recovery cover capped at $2 million.
With AIG Life’s Forward Underwriting benefit, you can increase your personal insurance when a business event or personal event occurs.
If a trigger event occurs, yet the policyholder does not exercise the option available, the Forward Underwriting benefit is still retained for later use.
AIG Life gives policy holders numerous opportunities over the life of their policy, including every 3 years, to exercise an option. This is independent of whether a ‘business’ or ‘personal’ event occurs.

THINGS TO CONSIDER

Cost is a consideration. Although this extra can’t be labeled expensive, it is still a regular added expense to be included in the perhaps limited budget of a younger client.

As with all life insurance products, you can’t buy over the counter. Consulting a licensed financial planner is a must if you want to achieve the best results for your particular circumstances.

As with all insurance policies, terms, conditions and qualifications apply. See the PDS for full details.

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