Synchron has revealed the prototype of the fixed term level life insurance product it has developed jointly with AIA Australia.
Speaking at a media briefing in Sydney, Synchron director Don Trapnell said the idea came about after researching how life insurance products were sold in the UK. He identified there is a "love-affair with yearly renewable premiums" in Australia, which he argued was resulting in an epidemic of policy lapses.
"Policy replacement is just not an issue in the UK. People stay on the books a lot longer," he said.
Of course, the steep price difference between yearly renewable premiums and the current level products available in Australia meant the latter never gained much traction.
"That 200% level premium was always going to be a bitter pill to swallow," he added.
As a result, Synchron and AIA (who also consulted with two other dealer groups) began designing a level product that, in AIA Australia retail product manager Stephen Baxter's words, provided "greater certainty to clients, consumer affordibility, a range of options after the fixed-term and guaranteed renewability."
"Fixed term level life insurance products have been widely available in international markets for some time, and we think it's time that Australians had more choice when it comes to how they structure their life insurance solutions," Trapnell concluded.