Heffer says: “Ageas Protect has brought a low start product to market. It provides full cover from day one but the premiums are lower in the early years. Premiums are worked out on the basis of the client’s age and health at outset and then increase by a fixed percentage each year. So while premiums do increase, the financial commitment is know.
“Those choosing the low start option will ultimately be paying a higher premium than normal in the later years and will pay more overall than if the low start option had not been exercised. However, for those clients who need cover but are on a tight budget such an option may well be expedient for them. Advisers would be well advised to refer to the disclosure of total premiums, which is now printed on all life assurance quotations, in order to draw a comparison and make the appropriate recommendation for their clients.
“The low start term assurance is available on a single and joint life basis and pays on death or terminal illness and, where critical illness is included, on the earlier diagnosis of one of 40 critical conditions. The contract is supremely flexible. Critical illness cover can be added in later, the term and the sum assured can be increased or decreased and policies can be converted to joint life from single life or vice versa. Naturally further underwriting may be required where cover is enhanced or increased.
“Clients have the option to decline the annual increase in premiums and under those circumstances the sum assured would reduce. Care would need to be exercised over that decision but it may be an acceptable quid pro quo if money is tight and the lower level of cover does not compromise their financial plan, or indeed they need less cover. The contract allows premium increases to be resumed when more money becomes available.
“This contract may not be suitable for those that can fully afford their cover now, but it provides all the options for those who cannot. It enables advisers to arrange full mortgage cover and family protection for such clients rather than a nominal benefit which would alleviate only short-term financial hardship. It is a good option for those needing a higher sum assured now than in a few years’ time, perhaps when their children are no longer dependent, when they can then opt to reduce their sum assured. “