As you progress through your life journey your circumstances evolve. Your Flexible Life Protection policy can evolve with you if you manage it correctly. Your Financial Advisor can assist you with this on an ongoing basis. In addition, Acorn Life works with your Financial Advisor in conducting a specific policy review of your premium and benefits every five years to check their sustainability. 
 

How it works 

1. What is a Reviewable Protection Policy? 
A reviewable protection policy is structured to provide life cover and other protection benefits throughout your lifetime. Upon inception of this policy, you selected the level of benefits and the period of cover that were most aligned with your needs at that point in time. This policy was designed with flexibility, enabling adjustments to the benefits (subject to medical evidence) and extensions of the coverage period as your requirements evolve. 

2. When Are Reviews Conducted? 
Prior to each fifth policy anniversary, your policy will be reviewed to check if your current premium level and the fund you have built up are sufficient to sustain your selected benefits for at least five more years from the anniversary. In checking this, we allow for indexation of your premium and benefits if you have selected this. Where your benefits are not sustainable for five more years, we will contact you to help review your policy and adjust your premium and/or benefits to an appropriate and affordable level.  

3. The Importance of Reviewing Your Protection Benefits 
The need for life cover or other benefits may change throughout various stages of your life. For instance, the requirement for significant life cover might diminish once children become financially independent or when mortgage obligations are satisfied. In such cases, reducing the level of life cover may be beneficial, given the increasing cost of maintaining such benefits with age. 

Should your financial commitments evolve such that premium payments become burdensome, it is possible to eliminate optional benefits while retaining core covers, such as life cover or critical illness benefits. Regular reviews of your policy are encouraged to ensure that the coverage continues to align with your needs and circumstances. 

4. Financial Mechanics of Your Policy 
Premium payments are invested into a fund linked to your policy. Initially, the premiums are set higher than the cost of benefits, with the surplus being invested. Over time, as you age, the cost associated with maintaining benefits rises and may eventually exceed the premiums paid. At this juncture, the invested fund serves to bridge the gap between the cost of benefits and the premiums. 
Your policy remains active if premiums are continuously paid at the required level to maintain a positive fund value. While certain benefits may cease at specified ages, life cover can continue as long as required. It is prudent to regularly reassess your benefit cover and your required duration of coverage. This will allow you to ensure that your premium level is sufficient to achieve this. You can consult with your Financial Advisor regarding your evolving benefit needs. 

5. Factors Influencing Premiums 
The following factors determine your required premium to maintain your benefits: 

• Your age at the time of review. 
• Your selected benefits currently in place. 
• The accumulated value of your fund. 
• Your desired duration of coverage. 
• Your smoking status. 
• Any additional premium loadings linked to medical conditions. 

6. Policy Reviews Explained 
Policy reviews are conducted to verify that the benefits within your policy remain adequately funded. Reviews evaluate factors such as the level of benefits, premium payments, the value of the linked fund, and other potential options. Should a review indicate that the premium payments and fund value are insufficient to sustain your benefits, suitable options will be communicated to you to maintain your policy for a further period. 

7. Why Premiums May Increase 
Premium increases may be required as you grow older due to rising benefit costs which are directly linked to your age. If at any review prior to each fifth anniversary, it is determined that the combined value of your premiums and fund is inadequate to cover the cost of benefits for the next five year period, an increase in premium will be necessary.  

Additionally, you may have set your premium to sustain your benefits for a specific period of years. As you approach the end of that period, your premium will need to increase to keep your policy active and maintain the benefits for a further period beyond that. 
 
Finally, if you have adjusted your premium and/or benefit level since you originally set them, or if you have missed premium payments, this can impact the duration of your policy sustainability and the premium required to maintain its sustainability.

8. Indexation 
Indexation, if you have selected it, provides an automatic annual increase in premiums and corresponding benefits, intended to mitigate the effects of inflation. While this approach results in higher premiums, it affords additional coverage without necessitating new medical evidence. 

If your policy has indexation, it does impact your required premium level, and you should consult your Financial Advisor in deciding whether you still need this feature. 
 
9. Options for Policy Adjustments 

Depending on your changing needs, you may choose from the following options to modify your policy: 

• Increase your premium to maintain current benefits. 
• Maintain premium at the same level but reduce the benefits provided. 
• Remove non-essential benefits, such as surgical cash or hospital cash benefit. 
• Maintain life cover only or even a minimum level of life cover. 
• Discontinue the indexation feature. 

It is crucial to engage with your Financial Advisor before implementing any changes to ensure you fully understand the potential ramifications. 

10. Frequently Asked Questions 

What if my benefit requirements are reduced as I get older? 
Your Financial Advisor can assist in determining an appropriate level of benefits that suits your present circumstances, and this will dictate your required premium accordingly. 

What if the premiums become unaffordable? 
You could consider adjusting the level of benefits or removing optional covers to manage costs effectively. 

Is increasing premiums the only solution? 
Other available options include reducing benefits or removing specific policy features and this may allow you to keep paying your current premium. Your Financial Advisor can help you with this. 

11. Next Steps 
We strongly advise you to regularly review your protection needs and discuss any concerns with your Financial Advisor, who can offer a complimentary financial assessment to help ascertain the most suitable level of benefits for your current life stage. 

12. Important Notice 
The information provided herein is intended solely as a general guide. The specific terms and conditions applicable to your policy are detailed within your policy documents. In the event of any discrepancies, the terms of the policy shall prevail. 

Acorn Life DAC is regulated by the Central Bank of Ireland.