A reader has queried whether QPR takes the sum insured into account in our Research Ratings.  And the answer is yes, we do consider the amount paid by each insurer. In fact amount paid are a vital part of a value-based assessment approach - and something we capture much better than simple feature lists of benefits do. 

In trauma insurance, some companies pay the full benefit for an item, others only make a payment of 10% or 20% of the sum insured because the condition was not severe enough to warrant a full payment. Our score is varied according to how much would actually be paid. In the scenario for Child Trauma, we have a claims amount of $100,000 and calculate how much would be paid out by each insurer.  

Furthermore, based on adviser feedback we have corrected our ratings to reflect the fact that Asteron does include the option to convert their child cover to adult trauma at age 21. Interestingly, if the parent is on Trauma Recovery (TR) and considering converting their child cover to TR with Early Trauma they are required to complete an application. 

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

Introduction

The World Health Organisation states that 130 different types of brain tumours exist. A benign brain tumour is a non-cancerous growth in a distinct area of the brain. The survival rates for patients with benign brain tumours are higher than others, however this depends on the size and location of the tumour within the brain.

Proposed sub-items

Notes

There are some noticeable differences between insurers such as whether partials exist, or if the spinal cord or tumour on the pituitary gland is covered. We have tried to make the sub-items clearly demonstrate the variation between insurers.

Why is this important?

Although QPRs weighting of this item is low, it would be of high interest to those that have a family history of brain cancers. With a lot of insurers now having specialised cancer products we would like to ensure that our rating is relevant. 

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

It has been announced that ASB and AIA are working together to offer current and new ASB home loan customers Compassionate Care. This benefit is free and is intended to offer customers some relief in the instance their co-borrower dies. Customers will be relieved of paying the interest portion of their mortgage for up to 12 months.

“ASB and AIA have launched Compassionate Care, a free home loan benefit for new and existing ASB home loan customers that covers the interest costs for about 12 months if one of the borrowers on the home loan dies.

It comes at no cost to the customer, and ASB and AIA say they have worked hard to ensure the process is simple and easy, with no requirement to sign up or activate the benefit.

AIA chief product and vitality officer Len Elikhis said ASB and AIA had conducted research to understand the needs of home loan customers and determined that the death of a borrower was a significant point of stress.

Not having to pay interest costs would give customers time to work out how they wanted to proceed with the loan, he said.

AIA will be tasked with adjudicating the claims.

It gave the insurer the chance to cover a large group of people, he said, and strengthened AIA’s partnership with New Zealand.” Click here to read more

This is a smart offer. It covers loads of people. As Len Elikhis points out - it is a significant concern to borrowers. It is also relatively low cost and could naturally lead to a conversation about wider cover requirements. This is also not something you have to leave to the big insurers. I know of one insurance broker who advertised free windscreen insurance for any client that bought car insurance with them. Whether the preferred car insurance paid it or not didn't matter - if it wasn't covered by the insurer they just paid it themselves. Good consumer offers like these create opportunities. 

In other news:

The depth of anger at the approach to regulation in Australia is being revealed with news like this: 

Call to boycott Australian financial adviser exam

nib: Lifeline Aotearoa Increases Support As Demand Surges Due To Covid-19

ICNZ: ICNZ And Banqer Partner To Empower Young Kiwis

While there aren’t usually many suicide claims made, Partners Life is now predicting that there will be an increase in suicide claims in the foreseeable future. Naomi Ballantyne has linked the economic effects of the pandemic to increased mental health problems and self-harm.

“Life insurance company Partners Life expects a rise in suicide claims as a result of businesses failing in the economic downturn caused by the Covid-19.

"We've certainly experienced already suicides that are directly related to businesses being shut down," Ballantyne said.

The Covid-19 economic crisis was putting unprecedented pressure on businesses and their owners, and there have been predictions the pandemic could result in a rise in self-harm.

Business failure could have an intense emotional impact on individuals, and business failures were sometimes implicated as a factor contributing to owners' sudden deaths.

In desperation, people sometimes convinced themselves that their families would be better off with a payout on their life insurance policies than with them remaining alive, Ballantyne said.” Click here to read more

In other news:

FSCL: FSCL's 'allegations against a very senior parliamentary officer' This covers the issue of the right to use the word 'ombudsman'

Reinsurance sector won't achieve cost of capital in 2020, outlines Fitch Of course, many categories of business will not achieve their cost of capital. 

Financial advice saving retirement futures: Adviser This trend isn't confined to KiwiSaver advice either - events cause people to reflect on their contingency planning, including risk.

ASB: ASB to waive home loan interest, if a borrower dies

It has been announced that AIA will be offering additional support to advisers. In the announcement AIA stated that they will be offering advisers commission boosts in two parts. The first will be focused on offering advisers 20% extra Basic Initial Commission on AIA Living applications submitted using eApp. This offer is being extended until 1 September 2020. The second method will be to offer a commission boost as part of their small business support package. AIA is looking to offer an additional 20% Basic Initial Commission on AIA Living applications submitted using eApp. This offer will run from 2 June 2020 until 1 September 2020.

“So far, 2020 has been a challenging year for us all. At AIA we want to help support you, your business, and your clients to make 2020 memorable for the right reasons.

We know from your feedback that the current biggest issue for you and your business is cash-flow.

That’s why we’re excited to be launching our 20/20 in 2020 offer that has two components: sharing the value of going digital and our new small business support package.”

In other news:

Professional IQ: Professional IQ launches level five version two

Digital advice the mass market solution: Carlyon

Economic crisis just getting started, says ASB

Below is an outline of the banks and other direct providers with a map as to which benefits and options they offer.

If you would like a PDF version of this table you can download it here:  Download Product Mapping - December 2017

Worth reading the detail in ASB's economic note if you are interested in proposals to change the targets the Reserve Bank of New Zealand uses to help set interest rates. The discussion of the various alternatives provide a good yardstick to consider the proposals. Link. 

A little while ago we blogged about the causes of death, the main causes do not change a lot in short periods of time, so the table below, based on Ministry of Health data from 2011, is still a good views of the main causes. The reason for returning to this is to consider the causes of death in relation to the exclusions common in non-underwritten policies. 

Pre-existing conditions, whether with a blanket cut-off at application, or with the ability to include them after five years without recurrence or treatment, are most likely to affect the categories of cancers, heart attacks, strokes, and respiratory diseases. What proportion of these causes are likely to emerge from a pre-existing condition or pre-disposition?

Now look at some of the other categories - take accidents, at 15% of the causes of death, and recall the exclusions relating to heights, speeds, presence on a building site, and certain occupations. 

Lastly, look at the rate for suicide, which might also be considered a death from depression or mental illness, this is one of the top five causes of death at 8% of this group, exceeding the level for strokes. Many of the non-underwritten policies contain long suicide exclusion clauses (up to five years), and increasingly bank insurers are lengthening their exclusion clauses as well (up to three years). 

These are the factors behind the recent changes made by Quality Product Research to the increased penalty for pre-existing conditions exclusions in the product quality database for Momentum Life and ASB Easylife. Other non-underwritten products will be added to the database and scored along similar lines. 

We have just uploaded the Quality Product Research Limited database QPRV10.1 to Quotemonster and subscribers. This version included the following changes:

ANZ Trauma Cover:

Policy wording also updated to the most recent document in the database, standalone cover.

ASB Mortgage Protection Review:

Review & change made to Offsets / Mental Health Limitation / Partial Disability provisions

Asteron Life

Enhancements of Trauma, TPD & Mortgage Protection for Business and Personal  products (effective 19 June 2017)

Kiwibank Mortgage Protection Cover:

Product has been rated & policy wording uploaded to database

Westpac Trauma (accelerated only)

New score added under ‘Diagnosis & Partial benefit’ to capture ‘minor heart attack’

Sovereign Critical Illness 

Updated pricing is being tested and will be applied to Quotemonster by tomorrow morning. The policy wording for these product enhancements has not yet been reviewed and will be reviewed and updated by 26 June, the QPR database will be updated again during that week. 

We recently had an adviser ask us this question: 

If you are on claim with a bank mortgage cover and your mortgage is repaid during your claim does the claim end before you get to the end of the claim term?

Here is what we found:

ASB – Mortgage and Income Protection, benefit continues after mortgage has been repaid until the end of the chosen payment term.

Westpac – payments will cease if the mortgage is repaid. If disabled after the maximum 30 months and the life assured meets the TPD definition, Westpac will repay the outstanding loan amount. The policy then ceases.

Other banks have either Income based products, or an Agreed Value with a chosen benefit amount (Living Expenses).