Sovereign allows term life policies to be suspended
Sovereign has said it will let customers put their term life insurance on hold for up to a year if the life covered is made redundant.
Friday, March 13th 2009, 9:18AM
Sovereign managing director Simon Blair announced the changes at the PAA conference in Rotorua.
The change is packaged to show that Sovereign is helping people out on the current economic downturn. Its announcement follows one from its parent, ASB Bank, which has set up a $1 billion loan fund for New Zealand businesses to borrow at below market rates if they can demonstrate the loans will create employment, or prevent people losing their jobs.
Blair said that as the recession bites and unemployment rises, household spending maybe cut or redirected to the ‘must-haves’.
One industry concern is that people will stop their insurance coverage.
Under the changes Sovereign term life insurance policies can now be put on hold for up to 12 months if the person paying the premiums is made redundant between 9 March 2009 and 31 March 2010.
During this period, premiums on the policy will not need to be paid and claims will not be accepted. At the end of the 12 months, or earlier, the policy can be restarted without the life assured having to provide additional medical information.
To be eligible, the policy must be in force on 1 April 2009.
In addition, to ensure that families continue to have some protection while the policy is on hold, Sovereign will provide free Accidental Death cover on the life assured, up to a maximum of $250,000.
This offer will also be available to any member of the immediate family of a person who is made redundant and can no longer afford to pay the premiums on an eligible Sovereign term life insurance policy because of the redundancy.
“Our aim is to give peace of mind to the quarter of a million New Zealanders who hold term life insurance with Sovereign by removing a potential worry from their list,” Blair says.
“This will help our customers reduce their monthly bills and remain protected”, Blair says.
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