Introduced in 2002 and passed back to existing ex-CMLA clients from July 1997 onwards, eligible policies qualified for the Loyalty Bonus benefit which automatically increases payment by five percent at no extra cost.

 

While the ex-CMLA products are no longer open for new business, it’s important that we continue to look after our existing clients. The Loyalty Bonus benefit was introduced as part of a product update in 2002, so there are many clients who have qualified for this additional benefit, and many others who are nearing qualification of the benefit.

 

So, for a client who has an existing policy with a Life Care and TPD Cover sum insured of $1 million, and a Trauma Cover sum insured of $300,000, once the policy has been in force for more than five years, the level of cover will automatically increase to $1,050,000 Life Care and TPD Cover and $315,000 Trauma Cover.

 

While the Loyalty Bonus is to be used at claim time to reward clients, the bonus can also be used as a mechanism to reduce a client’s premiums. Clients have the option of reducing their sum insured by a small portion which reduces their premiums but still maintains sufficient coverage. Taking this approach needs to take into account any future changes to sum insured such as indexation, while ensuring that the client remains adequately covered.

 

When working out whether a client qualifies (i.e. if the fifth anniversary has occurred) we treat the original policy as a continuation if the policy is either reinstated (under our usual reinstatement terms) or is a replacement policy¹.