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FAQ's

What is life insurance?
What is term life insurance?
How long does the application process take?
Why does the insurance company want to know my financial information for life insurance?
Who owns my policy?
Can I change the owner of my policy at a later date?
Will my premiums increase?
What is indexation?
What are my payment options?
When will I make my first premium payment?
What would happen if I stopped paying my premiums?
Do I need to provide evidence of health?
Do I need to see my doctor?
Are my health assessments free?
Does smoking affect my premium?
What happens if I change my mind?
What happens at claim time?
When does my cover end?
What is the difference between term life insurance and mortgage repayment insurance (MRI)?

 
What is life insurance?

Life insurance is a contract between an insurance company and the insurance policy owner(s). The insurance company pays a cash amount or death benefit to the beneficiary(s) named in the policy upon the death of the insured named in the policy.

Purposes of life insurance include providing financial security, funding business continuation and satisfying estate tax requirements among others.

The two main types of life insurance policies are term life insurance and permanent life insurance.

 

What is term life insurance?

Term life insurance is the most basic form of life insurance. It provides coverage for a specified period of time (e.g. 1, 5, 10, 15, 20, 25, or 30 years) in exchange for a specified premium. If the death of the insured individual occurs within this period of time or term period, the insurance company will pay the death benefit. If the term period expires while the insured individual is still living, the policy terminates and no death benefit will be paid.

The two main types of term life insurance policies are level premium term life insurance and yearly renewable term life insurance.

 

How long does the application process take?

The length of the process depends on many factors, but you can generally expect to receive your new policy 4-6 weeks after submitting your application. 

 

Why does the insurance company want to know my financial information for life insurance?

An applicant's financial information is among several factors used to determine the amount of insurance the company is able to issue to an applicant. This information is required by ALL insurance companies as they must justify the coverage amounts of all policies they issue.

Income multiples are one method of calculating coverage amounts, which is why annual income is required. Net worth helps insurance companies develop a picture of the family's overall financial position and potential loss in the event of the insured's death.

A common misconception among insurance consumers is they can purchase any amount of life insurance they desire, regardless of financial considerations. This simply is not the case. All insurance companies use financial information to determine allowable coverage amounts. This is done to control fraud and limit excessive insurance situations. 

 

Who owns my policy?
- Single Application
You do. You may change the beneficial owner at any time after the policy document has been issued by contacting us. If a claim is made the payment goes directly into your estate or directly to the beneficial owner if you have changed ownership, which allows them to have access to funds as soon as the claim is approved.

- Joint Application
You own your partner's policy & vice versa. You may change the beneficial owner at any time after the policy document has been issued by contacting us. If a claim is made the payment goes directly to the beneficial owner, not into the estate, which allows them to have access to funds as soon as the claim is approved.

 
Can I change the owner of my policy at a later date?
Yes. You may change the beneficial owner at any time after the policy document has been issued by contacting us.

 
Will my premiums increase?

Every year your cover and premiums will increase with your age and indexation (based on the Consumer Price Index). The illustration supplied by your selected provider will show the estimated increases over a period of years.

 
What is indexation?
Indexation is a way of keeping the amount of cover relevant to the cost of living. It is linked to the consumer price index (CPI). Most providers give you the opportunity to decline each year.

 
What are my payment options?
You can pay either by credit card or direct debit.

 
When will I make my first premium payment?
Once your selected company has processed your application and you are accepted, the provider will action either the direct debit or credit card authority you signed at the time of your application. If your application is not successful payment will not be taken. (Note - you can choose the date of the month you wish to pay)

 
What would happen if I stopped paying my premiums?
You need to maintain your premium payments in order for your insurance cover to remain in place. If you stop paying premiums your cover will cease and no money will be refunded to you. If you need to change bank account or credit card details you can contact us and we can arrange for the appropriate forms to be sent to you.

 
Do I need to provide evidence of health?
Yes. The underwriting will be based on the answers to your questions. It is important that you disclose all relevant medical information that you are aware of on the application form. The underwriter may ask for further information or contact your Doctor for a medical history.

 
Do I need to see my doctor?
Under most circumstances underwriters are able to make an assessment from your submitted electronic proposal based on the information you have provided. However, if there are some health issues the underwriter may write for further information from your Doctor, send a health screen nurse to complete an assessment or ask you to attend a full medical with your Doctor usually at no cost to yourself.

 
Are my health assessments free?
Yes. If an underwriter requires further information i.e. writes directly to your Doctor, sends a Health Screen Nurse for a consultation or asks you to have a full medical these visits are usually paid for by your selected provider.

 
Does smoking affect my premium?
As a rule smoker's premium rates are higher than those of non smokers. It is possible to change your premium in the future should you stop smoking. The providers require you to have stopped smoking for a year in order to alter your premiums to non-smoking rates. You can contact us to send you the appropriate declaration form to make this change.

 
What happens if I change my mind?
It’s not a problem. If you decide you do not want the plan you can cancel it within 14 days of receiving your policy document - (known as the free-look period). You will need to contact us in writing to let us know that you no longer require the policy so that we can cancel it with your nominated provider. Any premiums paid during the free-look period are fully refundable from the nominated provider.

 
What happens at claim time?
We need to be informed immediately that a claim needs to be made and we in turn will notify the product provider.
Part of the requirements to pay a claim are as follows:
 
  • Birth certificate
  • Death certificate
  • Policy document
  • Completed claim form
 
When does my cover end?
Cover will cease when you inform the provider in writing, you cease paying premiums or the policy expires (see our product comparison to check the length of renewablity as this differs for each provider). In any of these cases the policy will cancel & no monies are payable.

 
What is the difference between term life insurance and mortgage repayment insurance (MRI)?
Both are term life insurance with no savings and surrender value. Earlier MRI usually decreased as the size of the loan decreased (decreasing term insurance). These policies are not very common now as clients found them inflexible.

The modern MRI is similar to term insurance and is based on the amount of the mortgage borrowed. This cover does not decrease as the loan is repaid.

 

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About Us

Futureproof Life is a family owned business specialising in risk management & lifestyle protection solutions for businesses & families.
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Phone 09 413 6070