Suspending Cover

The Suspending Cover Benefit allows you to suspend your policy for a period of time due to financial hardship.

As financial hardship may be temporary, using this benefit may be a good alternative to cancelling your policy altogether as you may find it more expensive to apply for a cover again due to your age or a change in your medical history.

Ask your financial adviser about which insurers offer this benefit, which may also be called Premium Holiday.

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When can I suspend my cover?

Generally you can suspend your cover if your policy has been in force and paid for at least 6-12 months and you are suffering from financial hardship due to:

Unemployment
Being on sabbatical, maternity, paternity or long term leave from work
Household income dropping by 30% or more during the previous 3 months

How do I use this benefit?

If you wish to suspend your cover, the owner of your policy will need to inform your life insurer in writing within 30 days of your next premium due date. You will also need to submit evidence of financial hardship.

If you wish to reinstate your cover, you must again inform your life insurance company in writing. In some cases, if you do not ask for your cover to be reinstated within the 12 month period, your cover may be cancelled.

What are the benefits of Suspending Cover?

Suspension of cover and premiums for up to 12 months
Allows you to reinstate cover without serving any further qualifying periods
If you have multiple cover types, you may have flexibility to suspend one cover type and maintain another.

What other options are available to me to make my cover more affordable?

A number of options may be available to you to help make your cover more affordable:

If you are on stepped premiums, you can elect to freeze your premiums which means they won’t increase each year due to a change in your age.
So your policy keeps up with inflation, your level of cover will automatically increase by the rise in the Consumer Price Index or by a set percentage each year. You can opt out of this increase if you wish, which may make your premiums more affordable.
You may want to consider reducing your level of cover. This can be done at any time by simply contacting us who can arrange it with the insurer.

Important to note

It is important to note that while your cover is suspended, you will not be able to make any claim on your policy.

Published: September 1, 2015
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