Quality Product Research: Medical Exclusions Major Review Update

After many months of discussion and consultation, we are pleased to say we have finally put together a comprehensive list of Medical Exclusions and would like to publish this with the next release of our database. Although most insurers work on a case by case basis in regards to claims, we have based our rating on the policy document rather than general statements or current claims 'practice' which it is not possible for us to assess. We value each and every piece of feedback we have received and would like to share the list we have  updated here - Download Medical Exclusions 2021 

The list is more comprehensive and so total scores (which in exclusions result in negative scores) are higher. A reminder however, that these are still constrained by the weighting for exclusions as a whole within the product, so this does not represent any increase in the weighting for exclusions in the overall rating. There are, of course, some variations between the old approach and the new more comprehensive view. There are some weighting issues still to address. The exclusion impact for HIV is probably slightly too high given its population incidence. There is an argument that this disorder should be insurable now. 

Our grateful thanks to the insurers that participated in the consultation. Adviser interested in the sub-items for the exclusions under medical should contact us directly (email for our researcher, Doreen Dutt is below) if you would like to discuss the ratings. We shall compile a list of names and see if there is sufficient interest for us to run a special feedback session. Please feel free to email through any comments to researcher@qpresearch.co.nz as this helps to improve the accuracy and relevance of our ratings. 


Quality Product Research: Health Insurance - major review process commenced for Exclusions (feedback closure 30/05/2021)

Following on from our correspondence in mid-March, if you wish to submit any feedback or claims experience to assist us with our review on Medical Exclusions, please do so by 30 May 2021. We appreciate the feedback we have received so far and look forward to creating a new model which will also be posted for feedback in the next few weeks.


Quality Product Research: Health Insurance - major review process commenced for exclusions item rating

Introduction

Medical insurance is one of the most hotly contested areas of product comparison. Adjustments are made frequently to many features. Exclusions, however, are complex and difficult to compare. Although we update our exclusions ratings with every new product change released it is time to review the method and balance of the scoring of these items. We have therefore started the process of a major review.

Theme of review

The themes of this review are:

  1. A thorough review of all terms
  2. A focus on the relative weighting of the terms
  3. Calling for claims examples of how the terms are applied

Review process

We have alerted advisers and insurers to our plan to do a review and asked for data on the themes above. Changes will be based on our view of all the information sent to us.

We will then publish a model for changes to the guide scores for exclusions sub-items and ask for input on the proposed new model. Further changes may be made at this stage.

We are seeking claims examples for the review. Further changes may be made at this stage.

Timeline for review

March - advise review started

April - review claims information

May - consult on new model for rating

June - implement revised ratings

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


Good to see: actively managing exclusions and loadings

nib has announced that from February they will pro-actively manage exclusions and loadings: 

We’re taking proactive steps by reviewing existing members policies’ exclusions and loadings

For nib, our purpose is our members’ better health. Up until now, nib has relied on our members or their adviser to seek a review of any exclusions or loadings that have been applied to their policy. Starting February 2020, nib is changing our business process to proactively contact members who have special terms on their policies to encourage them to request a review if their health has improved, to ensure they are getting the best value from their health insurance.

Members who are eligible for an exclusion or loading review will be contacted by nib. We will offer them the opportunity to provide updated test results and disclose any new information relevant to their assessment.

Our underwriting team will seek confirmation of whether relevant symptoms still exist and whether the member has been treatment free for the period required. As part of the review, we will also be referring any members that could benefit from our nib Wellness Programs.

If you have any questions please don’t hesitate to contact our Adviser Partner Manager team.

Any other insurers that are taking this approach, I would love to hear from you. 


Causes of Death and Non-Underwritten Products

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. 

 

Causes of death top five 30 to 54


Should you buy the insurance with the ticket? the parcel? the new electronics? Rarely, it seems

This article from thisismoney.co.uk gets under the hood of many short-term travel, parcel, and warranty insurance products. You should read it. I have several colleagues in this industry who are convinced of the value of 'micro-insurance' of this type to re-start the engine of growth in the industry. But not if the policies are all this bad. The other thing that struck me was the use of long documents almost designed to have the consumer skip over them. Take this example: 

"[in the]...terms and conditions 40 items are exempt, including electrical goods, antiques, jewellery, food and anything made from metals, ceramics or glass. It means barely any items will be insured under the policy. Its website does ask for details of what will be included in the parcel, but it won’t stop the customer buying a policy if they list an item that’s excluded"

Well, that simply is not good enough. The reputation of the insurance industry will remain low and continue to fall with sales practices such as that. 


Recent AMP Product Changes

AMP Lifetrack and RPP recently made a range of enhancements to the following products in both the RPP and Lifetrack ranges. Quality Product Research ratings and policy wordings have all been updated on quotemonster.co.nz 

Life

RPP:

Clarification of the main Life benefit and Business Future Insurability wording.

TPD

RPP:

Increase in partial payments from 10% to 25%.

Addition of Life Cover Buyback option.

Lifetrack:

Increase in partial payments from 10% to 25%.  

Addition of Life Cover Buyback option.

Removal of claim restriction in last 3 months. 

Linked TPD cease age extension from age 65 to age 70.

The removal of the claim restriction in the last three months of the policy life is particularly welcome. It removes a strange, and yet probably rarely applicable, complexity. 

Trauma

In addition to the following enhancements the rating of the heart attack benefit in the trauma product has been reviewed by Quality Product Research and the rating has been revised, resulting in an improvement in score for this important benefit. 

RPP Trauma / Plus:

Alzheimer’s & Dementia definition - addition of supervision qualification measure.

Additional of Trauma Buyback Reinstatement Discount.

Diagnosis and Partial definitions - restructure.

Lifetrack Trauma / Plus:

Alzheimer’s & Dementia definition- addition of supervision qualification measure.

Diagnosis and Partial definitions - restructure.

Income Protection

Lifetrack:

Addition of Accidental Lump Sum (ALS) option.


Residency Catches Exist in New Zealand Policies Too - Not Just Australian Ones

With the treatment of New Zealanders at the hands of our Australian cousins being a bit topical right now I can see why Ben Heather's article yesterday on stuff.co.nz got the title: "Kiwis sold 'worthless' insurance in Australia"

ANZ's policy has a permanent residency requirement, and it turns out that even though Kiwis can stay as long as they like in Australia (subject to some conditions) this isn't, technically, 'permanent'. You can imagine some customers wouldn't know that. You can also imagine that the sales process may have been undertaken by a busy, non-expert, banker who might not have spent the evening prior scanning the policy document for possible fish-hooks. But when the issue was spotted ANZ did the decent thing and refunded the premiums. Although, given the number of New Zealanders in Australia, of which probably a quarter bank with ANZ, I respectfully suggest that everyone would win if ANZ were able to include New Zealanders in their cover somehow. 

It turns out that ANZ has a similar exclusion in their New Zealand policy document. This is the actual wording: 

• No benefit will be paid if at the date of the event of the claim the Person Insured is not legally entitled to live, or to work in Full Time Employment (or Self-employment), in New Zealand.

I think this probably covers Australians. Good on ANZ New Zealand for being more forward-thinking. 

The wider issue of residency is worth highlighting, however, and while ANZ's exclusion is considered more restrictive there may be a residency fish-hook buried in the application form of most other insurers. Some will ask the residency question directly on the application and decline cover to non-residents. Some will ask about country of birth because where you grew up can have a big impact on risk. Applicants need to read questions and answer them truthfully to ensure that their cover is valid.