Use dis­clo­sure grid to un­der­stand your pol­icy

Weekend Argus (Saturday Edition) - - PERSONAL FINANCE -

From Tues­day, all life as­sur­ance com­pa­nies that sell dread dis­ease cover will have to pro­vide you, as a po­ten­tial pol­i­cy­holder, with a stan­dard­ised dis­clo­sure grid that shows how their poli­cies pay out at four dif­fer­ent lev­els of the four main se­vere ill­nesses.

The As­so­ci­a­tion for Sav­ings & In­vest­ment drew up the grid to help you com­pare se­vere ill­ness cover across poli­cies on the four main dread dis­eases: stroke, can­cer, coro­nary artery heart by­pass and heart at­tack.

Life as­sur­ers have to pro­vide the grid in their mar­ket­ing ma­te­rial and on their web­sites only to peo­ple who buy new poli­cies from Septem­ber 1. By April next year, the grid must be used in quotes and con­tracts.

There is no obli­ga­tion to pro­vide the grid to ex­ist­ing pol­i­cy­hold­ers, but you can look up the grid that ap­plies to your pol­icy (if the pol­icy is still be­ing sold) be­cause this will help you to un­der­stand the cover you have.

It is very im­por­tant that you are aware of the per­cent­ages at which your pol­icy will pay out for each level of a se­vere ill­ness, as well as the de­bates over the dif­fer­ent pay­out lev­els.

And re­mem­ber that the pay­out level – along with a host of other is­sues – will af­fect the pre­mium you pay.

Any other ill­nesses the pol­icy cov­ers will af­fect the pre­mium and this cover could be very valu­able – par­tic­u­larly if you are at risk of con­tract­ing a less com­mon ill­ness that runs in your fam­ily.

The cost of the cover will also be af­fected by any guar­an­tees on the level of the pre­mium in­creases, the abil­ity to re­in­state cover af­ter a claim, and whether or not the ben­e­fits are stand­alone or are com­bined with other forms of cover, such as life and dis­abil­ity.

The is­sues are com­plex and you may need a qual­i­fied fi­nan­cial ad­viser to guide you through them.

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