A new service has been launched into the Australian market that’s designed to offer an alternative for some Australians looking to cancel their individual lump sum life insurance policies.
Called iExtend, this new offer is for eligible lump sum policy holders who are prepared to cancel their policy. The iExtend proposition, available via financial advisers, offers to take over premium payments for these policy holders, who will in turn receive a proportion of the insured benefit in the event of a future claim being made on the policy.
While a range of processes and conditions attach to this service, the overall purpose of iExtend is to help qualifying policy holders keep their life insurance longer.
A statement released by iExtend notes that, by co-owning a life policy with iExtend, policyholders eliminate future premium payments from the percentage of the policy that was to be cancelled, providing a greater portion of any eventual claim for the policyholders’ family – as well as greater financial certainty for them at time when they may need it most.
It cites the benefits for policyholders of co-owning with iExtend as including:
- The opportunity for policyholders to maintain cover even if health conditions may be impacting their life expectancy
- Greater certainty over the inter-generational transfer of wealth
- Increasing consumer confidence in the life insurance industry that it will be there when Australians need it most
iExtend notes many Australians facing retirement on reduced disposable incomes are driven to cancel their policies due to increasing insurance premiums which can typically rise 10-15% each year. It references KPMG research which reveals the average premium increase per policy for risk products in the 12 months to 31 December 2021 was 12% pa and 24% over the past two years.
The new service provider estimates it will return approximately $25-$50 million in life insurance claim benefits over the next 10 years to ordinary Australians who would otherwise have been forfeited as a result of a reluctant cancellation.
…iExtend wants to fill a gap in the insurance market
According to iExtend CEO David Sarkis, his firm’s proposition addresses a forgotten segment in the life insurance market: “iExtend wants to fill a gap in the insurance market and to partner with financial advisers and insurance providers to ensure policyholders can continue the valued relationship they have with them by accessing a flexible, innovative and alternative insurance option.”
iExtend, which does not provide financial product advice, says it is working with adviser networks across the industry, including self-directed advisers which represent, according to referenced research, the largest segment of licensed advisers in the market.
“We are excited to be bringing this flexible and innovative life insurance option to the Australian market and to provide a social wellbeing and quality of life benefit to those we partner with whilst also helping the insurance industry provide sustainable products and continue to service this market segment,” said Sarkis.
Advisers and other interested stakeholders can click here to access additional details about the iExtend proposition.