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Life Assurance
Thursday, April 1, 2010
Upgrade benefits

Metropolitan Life says it has upgraded its FutureChoice products and added FCPP – a FutureChoice Protection Plan (FCPP).

Explaining the developments, Eugene Kruger, Product Development Actuary for Metropolitan, says FCPP offers maximum cover with limited underwriting.
For cover below R500 000 only a few medical questions need to be answered and no further tests or blood samples are required. If customers choose cover of more than half a million up to R1 200 000, they will be required to answer a few underwriting questions and submit test results to Metropolitan, but they need only to do so within three months of the commencement date of the policy instead of pre-commencement, as is usual practice.
“Many of potential customers may be reluctant to apply for products that require underwriting. In the past, this meant they were simply unable to obtain cover. This has now changed, because what this product offers is a choice between a lower premium with full underwriting, and a higher premium with limited underwriting.” Premiums start from R75 per month.
“Unlike similar plans, FCPP provides a benefit upon death during the first six months of the policy,” he explains, “whilst similar products in the market provide no benefit or merely premium refunds. Furthermore, the customer enjoys free accidental death cover for the period between acceptance date and commencement date.”
Metropolitan offers a five-year premium guarantee, so premiums will remain the same for five years apart from voluntary increases selected by the customer. In addition, the guaranteed maximum increase at the first premium review will be capped at 20%, so customers know what to expect further down the line. Metropolitan understands that the one size fits all approach does not work, so the product allows for flexibility to choose between policy terms: either a whole life policy, or a term policy with a minimum of five years and maximum of 30 years.
“There are two options on this product to counter the effect of inflation. Customers may choose the cover escalation option at a fixed percentage between 3% and 10%. Alternatively, customers may opt for an escalation option equal to the Consumer Price Index (CPI). Both options ensure that your cover growth will be sufficient when you ultimately need it. Customers can also elect to have level premium and cover.”
Instead of stating the claim payout as a lump sum payment, customers are offered the option of either a Funeral Assistance benefit or Monthly Support Payout benefit. Funeral Assistance benefit offers an accelerated payout of 20% to a maximum of R30 000. This accelerated payout gives your family funds for funeral and other related expenses within 48 hours of presentation of a death certificate and valid claim, provided the claim is not within six months from the commencement date of the policy. The Funeral Assistance benefit will be deducted from the benefit amount before calculating the remaining amount payable under the claim.  The Monthly Support Payout benefit is an optional benefit that gives beneficiaries a monthly support payout to cover their monthly expenses instead of a lump sum payout. This means that a portion of the benefit amount will be spread evenly over a selected number of months and paid monthly to the beneficiaries to provide them with an income.
The Free January benefit option eases the post festive season pressure by allowing customers to skip their January premium payment and make up for it by paying a slightly higher monthly premium throughout the rest of the year. This would mean in January, the customer will have a bit more money to focus on essentials such as school fees and uniforms or even to recover from overspending during the festive season.
CashBack bonus is an optional benefit offering a percentage of the total premiums paid back to you after every five-year period. The policyholder also has the option not to take the CashBack bonus but let it vest and grow and receive a much bigger payout at a later stage.

Copyright © Insurance Times and Investments® Vol:23.4 1st April, 2010
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