Weekend Argus (Saturday Edition) - - PERSONAL FINANCE - SEE ‘LIFE WITH CAMERON’, PAGE 2

Mo­men­tum pro­vides cash sign-on pack­ages that, in the short ter m, can be greater than any com­mis­sion that would have been paid by a rep­re­sen­ta­tive’s pre­vi­ous em­ploy­ers.

How­ever, Jo­hann le Roux, the chief ex­ec­u­tive of Mo­men­tum Re­tail, says the churn­ing of prod­ucts against the best in­ter­ests of clients is not per­mit­ted. He says the switch­ing of risk life as­sur­ance prod­ucts has been the re­sult of the con­tin­ual en­hance­ments in ben­e­fits, and the re­duc­tion in premi­ums has been to the con­sumer’s ben­e­fit.

He says the switch­ing of risk poli­cies is more an is­sue for prod­uct providers be­cause they face the prospect of losses if poli­cies are can­celled early. These losses are due to the as­sur­ers’ up­front costs in is­su­ing poli­cies, par­tic­u­larly the com­mis­sions they pay.

Al­though risk prod­ucts have be­come in­creas­ingly com­pet­i­tive, they are also be­com­ing in­creas­ingly com­plex, mak­ing it eas­ier for un­scrupu­lous sales­peo­ple to get you to sign up for a new prod­uct, gen­er­at­ing a new round of com­mis­sions.

Of­ten, pol­i­cy­hold­ers are told only about the ini­tial pre­mium lev­els based on best-case sce­nar­ios, with pre­mium in­crease shocks ly­ing in wait for fu­ture years, par­tic­u­larly if they start suf­fer­ing from ill-health.

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