When is a guaranteed premium not?
When the fine print makes words flexible
Life assurance policies make use of terms that may give you a false impression about your contract, because the fine print reveals that words like "guarantees" and "permanent" are not what they seem. Policies are often sold with guarantees on the premiums - designed to give you certainty about what you pay for at least the first few years, but guarantees aren't always full guarantees. According to one life company, some of its competitors give guarantees that do not apply to increases in premiums. As a policyholder you may agree to a premium increase annually to buy more cover and ensure your cover keeps up with inflation. In a survey BrightRock did of eight competitors it found that five granted premium guarantees for the first 10 years that did not apply to these premium increases. Instead, these life assurers are pricing the increase in cover according to how old you are when the increase is applied - the guarantee against age-related increases does not apply to the new cover bou...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.