One thing that people hate when it comes to life insurance is the paperwork.

The application form is a bit of a book, and it can be a bit daunting to complete, even when you are fit and healthy. We advisers do not like them much either, but they need to be done.

What most people do not realise when they have existing insurance cover, that there are features built into many policies that let you increase them without lots of paperwork.

Often these are called special events and future insurability, Ok so how does this all work?

If you have a life insurance policy you will probably have special events increases built in, sometimes mortgage protection benefits have this too.

A special event is defined in your policy document; you will need to check the specifics of your policy, but they have a similar approach. 

Typically a special events increase will read like; If one of the listed special events happens you can increase your cover, usually your life cover, by $x up to % of your original policy. This has to be exercised within x months of the event. Often you have to be under a certain age and not terminally ill as well.

Listed special events usually include the following and there can be variations.

• Getting married

• Buying a house and increasing or taking on a mortgage

• Having a baby

• Getting divorced

• Taking on the dependent care of a close relative or family member 

When you have the listed events happen, you can increase your life cover without medical underwriting, meaning if you have medical conditions which have developed the insurance company cannot take them into consideration. You will have to prove the event, however.

Future insurability works in a similar way, but instead of an event triggering your ability to increase cover, a certain time frame allows you to do so. Depending on your policy, this could be every 2 or 3 years. This works on enabling you to increase cover at a % or $x value per increase based on your original cover to a maximum of 3-5 times your original cover. 

If you have selected this on a business cover, then this may come with specific events like changing shareholders, increasing company debt or company valuation. In some business cover situations, these increases can be exercised more than once per year.

Special events are built in, and future insurability comes at an additional premium. In all cases, the terms and conditions of your policy will govern how this will work for you.

Have a chat with us about what your options are; we can help translate this for you.