When major life changes occur, it is important to consider increasing life insurance cover. However in one month’s analysis of Norwich Union new business1 only three per cent of premiums related to increases in life cover.
When major life changes occur, it is important to consider increasing life insurance cover. However in one month’s analysis of Norwich Union new business1 only three per cent of premiums related to increases in life cover.
According to Norwich Union Life Australia Limited Managing Director Allan Griffiths, events such as birth of a child, marriage or purchase of a new home bring immediate financial changes and it is essential to top up life cover and plan for the future financial needs of any family.
When people make the decision to take out a life insurance policy, they are looking to financially protect their family in the event of their death, or permanent disability. Life insurance is a long-term commitment and as such should be considered when an individual or family situation changes.
“The birth of a child brings immediate and future financial demands. It is important that people recognise the importance of increasing a life insurance policy to cope with additional commitments,” said Allan.
People should consider their life insurance when they purchase a new home and increase their mortgage or any other debt. In the case of untimely death or permanent disability it is important that the policy holder’s family is able to pay off any major debts and eliminate financial stress at such a difficult time.
“A mortgage is both a financial and emotional strain if it can’t be paid off following the death of a loved one. An insurance policy should at the very least provide enough money to pay off the mortgage – and all other debt.”
Similarly, if the breadwinner dies there can be a very significant burden on the surviving partner and their children. How will the family pay for education, transport, holidays and the like living on a limited Government pension? And what if it is the mother of the children who passes away or is disabled – how will the father be able to afford full time care?” he said.
In a challenging risk environment, life insurance companies need to support advisers to ensure that their clients are aware of all the threats associated with not increasing their life insurance when their personal circumstances change.
From June 2002 Norwich Union Life is making available to some policy holders the opportunity to increase their death cover by up to $250,000 or 50 per cent of the current death sum insured (whichever is the lesser) without the need to undergo additional medicals or financial underwriting.
Norwich Union’s unique adoption of technology ensures that advisers can communicate this offer to clients on mass via automatically generated mailing packs, making it quick and simple to keep sum insured levels in line with client’s ever changing life insurance needs.
1Figures derived from Norwich Union New business premiums for month of March 2002 and determined from the percentage of new business related to endorsements.
Allan Griffiths is available for interview: 0419 307 319
For further information, please contact: Simon Morgan
Group General Manager Public Affairs
(03) 9829 8892
0407 966 632
Note to editors:
- Norwich Union Australia is a group of three specialist financial services companies; Navigator, Norwich Union Life and Portfolio Partners. Through these companies we provide products and services in the areas of wealth creation, wealth management and wealth protection for more than 300,000 customers throughout Australia.
- Globally, Norwich Union Australia is part of CGNU plc, the world’s seventh largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. CGNU was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
- CGNU’s principal business activities are long-term savings, funds management and general insurance. It has a market capitalisation of approximately A$40 billion at 03/04/02, worldwide premium and investment sales of more than A$74.8 billion from ongoing business and more than A$556 billion in assets under management. The group has 64,000 employees and more than 25 million customers.
- Norwich Union Australia has a sister company, CGU Insurance Ltd, a top 5 general insurance business, which operates independently in Australia.