Home / - Reviewable Premium vs. Guaranteed Premiums
A wide range of life, critical illness and income replacement insurance plans can now be set up on the basis that the premiums are either guaranteed for the term of the plan, or periodically reviewable during the plan term.
Guaranteed premiums are almost always more expensive than reviewable plans initially as the guarantee has to be paid for at outset by the plan holder.
Premium terms are confirmed on the client specific illustrations.
If the premium is guaranteed this means that it will not change during the term of the cover. If the premium is reviewable this means that it is likely to change.
How and when insurers review premiums differs by provider. Make sure the documentation is read carefully before committing to any plan. Factors that may change and lead to a change in the amount the policyholder pays are:
• the future level of claims the insurer pays
• the amounts of money the insurer will pay to reinsurance companies with whom they share the costs of claims
• the number of plan owners who give up their plans early
• the insurer’s expenses
• inflation
• investment returns
• taxes and
• the amount of money the insurer needs to hold as financial reserves.
Pros and Cons
Reviewable premiums should allow you to buy more cover now for the same premium.
The downside is that the cover might become much more expensive in the later years, particularly if the claims paid out to other policyholders are higher than the life office anticipates. This risk of higher claim costs is significant as medical science pushes new diagnostic techniques forward with accelerates claims.
Guaranteed premiums provides the absolute certainty that if you can afford the premiums now then they won’t change for the entire term of the plan.
11 May 2007 12:46:10
American researchers are to launch a nationwide trial to assess the impact of an omega-3 fatty acid on the development of Alzheimer's disease.
The study by the Alzheimer's disease Cooperative Study (ADCS) will assess 400 over-50s with the disease, to conclude whether the fatty acid DHA (docosahexaenoic acid) can affect its progression.
Joesph Quinn, director of the study and associate professor of neurology at Oregon Health and Science University, said that the research aimed to discover whether the health benefits of omega-3 fatty acids found in certain fish oils could also help to fight cognitive degeneration.
"By participating in this study, volunteers will make an invaluable contribution to Alzheimer's disease research progress," he commented.
"We are indebted to those who graciously volunteer to participate in clinical studies."
The 400 participants will undergo a number of tests, assessing cognitive status as well as monitoring alterations in protein levels in the blood and spinal fluid (changes in the blood and spinal fluid can be a marker for the progression of the disease).
60 per cent of those studied will be given two grams of DHA per day, while the remaining participants will receive a placebo, with the research clinics set to be established at 51 sites across the US.
Omega-3 fatty acids have long been associated with healthy living and it is hoped that the ADCS study will reveal new methods of fighting the onslaught of Alzheimer's disease.
12 June 2007 16:53:06
Friends Provident International (FPI), a branch of the top UK life insurance firm, has received approval for trading in the United Arab Emirates (UAE).
The insurer will open a branch in the business hub of Dubai, while maintaining operations in its smaller marketing office in the Dubai Airport Free Zone.
With the Dubai economy soaring, the move is sure to prove very lucrative for the firm, which already manages around £107 billion in funds.
Paul Tunnicliffe, director of international operations, explained the new deal:
"Securing a licence in the Middle East and gaining approval for a branch office is an integral part of FPI's expansion plans and further strengthens our commitment to international business and the region."
His sentiments were echoed by Matt Waterfield, general manager for FPI, who added:
"The UAE is central to our strategy for the Middle East. Securing the UAE licence and establishing offices within the central business district of Dubai is further evidence of Friends Provident's commitment to the region.
"We now have a robust platform from which to deliver new products and services which will add value to distributors and customers alike."
The move followed last month's speculation that fellow insurance giant AXA was considering a takeover bid.
30 April 2007 12:09:11
Antioxidants found in cherries could lead to lower blood sugar, decreased cholesterol and less chance of heart disease, according to new research.
Scientists at the University of Michigan found that an increased intake of powdered tart cherries among the rats used led to notable changes in metabolic syndrome, a condition related to heart disease and Type 2 diabetes.
Study author E Mitchell Seymour confirmed that though the findings did not conclusively prove that an increased cherry intake could help humans diminish their risk of heart disease, the results were encouraging.
"We are interested in a whole-foods approach, using amounts of fruit that are relevant to human diets," he said.
"We are enthusiastic about the findings that tart cherries conferred these beneficial effects at such a modest daily intake."
The rats were given tart cherries as only one per cent of their total food intake for 90 days, but displayed a marked decrease in glucose, insulin and cholesterol levels than the rats fed on a non-cherry diet.
Research from the Science and Public Affairs Forum in 2003 proposed that one in four Britons exhibited hallmarks of metabolic syndrome.
