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Quality Product Research: Inflation Adjustment item update for Life Cover

Introduction

Inflation is often overlooked when customers are looking to purchase Life Cover. Although it may not be necessary for short term policies, it is however, a valued feature for long term policies (i.e., those that are in place for 20 years or more). 

Sub-items rating review

Hello

Following up on adviser feedback, we have recently added the optional Inflation Adjustment feature to MAS increasing the accuracy of our rating for Life cover for this insurer.

Please note we currently only show the pricing difference between indexed vs non-indexed (as shown below) and the rating for optional items are excluded from the total rating you will see on your research report.

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Notes

The Inflation Adjustment benefit does not significantly vary among providers. Companies differ in expiry age, with Pinnacle being the only that expires at age 60. ANZ bank seems to be the only provider with a deduction for the sub-item “Excludes when premiums are waived”. A significant difference is whether the benefit is optional or included.    

Why is this important?

The benefit would be of high value for those looking to purchase long term policies. To not have this option would have a great impact in the future as you would understand that the cost of living will only increase as time goes on (and so should our Life cover). 

Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding.

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz

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