We have just uploaded QPRV105 onto Quotemonster and have also distributed it to all other subscribers. This version includes the following changes:
Momentum Life added for Life
AIA Business TPD, Trauma
Accuro update to Smartcare and Smartcare+
Income Protection review changes
All funeral providers updated
Review Funeral Cover item
Probably the most significant change is to income protection. You will note a narrowing of the range from the top to the bottom of income protection scores, due to reduction of the incidence rates for a series of secondary cover items.
Consumer NZ has warned that Funeral Insurance could be the most expensive way to pay for your final send-off. 'Consumer NZ reviewed 10 policies offering $10,000 funeral cover for a 64-year-old. The review found that by age 84 the amount paid in premiums exceeded the $10,000 cover with most policies. In some cases, the insured person would have paid twice what they were entitled to be paid out.' Read more from this article on Stuff.
We are continually surprised to find that as many as a quarter of all funeral cover clients could have easily purchased fully underwritten cover. They were simply attracted by the convenience of not having to answer health questions.
Apparently creating a fundraising page to fund funerals or support family members after someone's death is becoming increasingly popular. The average amount raised on funeral, memorial and tribute pages on fundraising site GoFundMe is $2,200 USD.
"No Life Insurance, Help Spouse" is the headline on a current GoFundMe page set up after a woman's husband died while ziplining in Costa Rica, the page has currently raised $7,495 USD. Just think how even just $50,000 of life insurance would have made a huge difference to them - and it is typically available for less than a dollar a day.
Click here to read more about the craze of crowdfunding and how although a few thousand dollars can help out surviving family it is well short of the kind of meaningful aid that would have been provided by a life insurance policy.
Funeral cover is often the subject of complaints, and the one reported recently highlights the issue of competency among the often elderly purchasers. In this case the report was headlined "Family should know when elderly sign up for funeral insurance..." an article by Georgia Forrester from the Manawatu Standard.
The story talked about how the purchaser of the cover believed that it was a 'savings plan.' This must be the kind of case that makes people at CIGNA sigh. Personally I would have liked the reporter to tell us why they thought it was a savings plan, because nothing in the CIGNA marketing material or policy would suggest that it is. The policy document is really, really straightforward and says this, just to make sure there is no misunderstanding:
This Policy does not have any surrender or cash value.
You begin to wonder what else CIGNA could have done. You cannot spend a lot of time describing what a product is not - the field is simply too large, and it ends up being confusing. You cannot spend all your time trying to figure out ways your customer will misunderstand you, and clarify those, for the same reasons.
But the marketer in me reminds me that it is simply not okay to blame the customer.
As it happens there were clues to the problem in the article - although perhaps out of manners this was not tackled directly. The problem may have been one of competency. When the son of the applicant said that he felt the family should know when an elderly relative signs up for insurance this is because he must have had doubts about competence, and feel that the family could have helped.
Older people do not like to surrender their freedom, or necessarily admit when they may doubt their ability to manage. Even if it was agreed that insurers should advise family, they have no legal right to do so. The law does not cease to respect privacy simply because of age. There is another downside which must be avoided when involving family - the sad fact that some families are not the best guardians of the welfare of elderly relatives -- elder abuse occurs.
Perhaps, if the volume of these complaints begins to look higher than the norm for other types of covers, then subtle and respectful ways to test the competence of the person applying may need to be found.
Did you miss the Fair Go item on Beryl's insurance? This covered the issue of a funeral plan that has been in force a very long time on the life of Beryl, who took out the cover when she was just 76 and is now in her nineties.
Like a lot of funeral plans the sum insured is low and the premiums are high. This was contrasted with the insurance for Andrew Hooker, a claims specialist lawyer, who described himself as a '52 year old overweight lawyer' and is paying just $70 a month for $300,000 cover.
The glaring fault in the interview was the failure to bring up these points: Beryl's cover would have been issued with no underwriting at all, and Andrew's would have been fully underwritten. Andrew's premiums will probably be rate-for-age (rise every year), whereas Beryl's did not.
At the same time a very good point was made about advice, by Andrew Hooker, and therefore in the segment as a whole: if you speak with a financial adviser then they might have recommended some alternative solutions:
If Beryl could have purchased underwritten cover then she would have qualified for more insurance
If Beryl could not get underwritten she may have been better off simply saving the money
Alternative funeral plans are on sale where the premium ceases when the accumulated cost reaches the sum insured. Others, including one now sold by Fidelity Life, which has something similar where the premium ceases at age 85.
Advisers wishing to see a comparison of funeral plans can do so by logging in Quotemonster.co.nz and visiting the research tools are of the site.