Introducing Mary
Retail Term Life Policy: $1.1 million with 5% indexation.
Mary* was diagnosed with Stage 4 Non-Hodgkin’s Lymphoma in 2018. Over the years, she had experienced multiple episodes of the disease, going in and out of remission. It has been over 18 months since her last episode.
Role of Mary’s adviser
Mary valued her $1.1 million life insurance policy, which she took out in 2002. However, due to ongoing healthcare costs, she decided, in consultation with her financial adviser, to reduce her cover to $600,000 and remove the indexation. Recognising her changed health situation, her adviser introduced the iExtend Co-Ownership option. After a pre-assessment, Mary was eligible to apply for co-ownership.
Role of iExtend
Mary’s adviser obtained two separate quote illustrations to split the original policy: reducing it to $600,000 and creating a second policy for the remainder of $500,000 with a 5% indexation. Mary retained ownership and paid the premiums on the $600,000 policy directly to the life insurer. The second policy, for $500,000, was co-owned, and iExtend paid all the premiums for this policy.
Just over 7 years later, after co-owning one of her policies with iExtend
Sadly, Mary passed away. While her own policy remained at the original sum insured of $600,000, the policy co-owned with iExtend had increased due to indexation from the original $500,000 to $703,550.
Her estate received a combined payout of:
Policy 1: $600,000
Policy 2 (10% of the co-owned policy): $70,355
Total combined claims payout to Mary’s estate: $670,355
| Retained with Insurer | With iExtend |
|---|---|
| $600,000 | $70,355 |
Mary’s estate receives a combined payout of $670,355.
* The content within this case study serves as an educational and illustrative example. To ensure confidentiality, certain details such as names and health conditions have been altered. The indexation rate may be fixed or vary yearly if linked to CPI (Consumer Price Index) or some other indexation factor set by the insurer.