How you loose money as a result of Life Assurance Replacement Agreements

The history of Life Assurance cost replacement agreements combined with the training of consultants/advisors or representatives will probably account for 40% of your monthly premium costs for assurance or retirement annuity products in South Africa.

Any ipolicy holder with monthly payments could probably get away with about half of their current costs or investments and get the same life cover and protection. The life assurers in South Africa did have an agreement in place which prevented consultants from replacing policies. Most of the consultants received commission on policies but a replacement policy would not attract commission. That old agreement has now been replaced by a new one that is difficult if not impossible to monitor as a client has to indicate that he understands why a new policy is better than an old one. You need an actuary to make an accurate assessment of the different benefits.

So many advisors will not recommend that you take a new look at your policies - simply because it is too much trouble and they may not get paid for it.

Do yourself a favour and pay some-one to do that for you. You will save your payment in the first year provided that you are healthy and may obtain new life or disability cover.