Detailed schedule of Partners Life Product Changes and Benefit Improvements

Partners Life Product Changes and Benefit improvements 

Special Events Increase benefit limits increased from 75% to 100% for aggregated sum insured and new special event added

Counselling Benefit increased “use by” time to 12 months after claim

Financial and Legal Advice Benefit increased “use by” time to 12 months after claim and the maximum benefit increased to $3,000

Special Events Increase deal on offer to customers who missed policy anniversaries. Customers will have a have an additional 12 months added to their 60-day time limit that applies to their immediate past anniversary

Dependent Child Funeral Support Benefit updated to include unborn child age moving to 20 weeks or weighing more than 400 grams

Bed Confinement Benefit added under the daily care of a registered nurse as an alternative requirement

Alzheimer’s Disease, Dementia, Aplastic Anaemia, HIV (medical acquired), Multiple Sclerosis, Major Organ Transplant, Diabetes definitions changed in Trauma Cover

Non-surgical Benefit (Private Hospital and Serious Illness Benefits) annual limit increased from $300,000 to $500,000

New Public Treatment Top-Up Benefit means Partners Life will pay for some treatments after customer has covered treatment in public system.  

$5,000 maximum limit removed for Second Opinion Benefit (Private Medical Cover)

New cover for mental health consultations has a maximum of $2,500 under Surgical and Non-surgical Benefits (Private Hospital and Serious Illness Benefits)

Optional Specialists and Test now includes Podiatrist as a specialist for consultations

Cancer definition simplified in Excess Waiver Benefit.

 

Income and Expenses Cover

Income and Expenses Cover is designed to include sustainability features, remove over-insurance and moral hazard opportunity, and provide customer support

Benefit is the greater of pre-disability income less offset x 75% of life assured’s share of pre-disability monthly domestic expenses

The cover term for Income Cover and Expenses Cover is to age 65 with payments term options of 2 years, 5 years and to age 65

Pre-disability income is the same as Income Cover

Disabled for occupation classes 1-4 includes 10 hours or 75% of activities but it moves from own to reasonable occupation after 12 months

Customers will be considered to be in occupation class 5 if they have been unemployed, on unpaid leave, working less than 25 a week, incarcerated in a penal institution, or legally barred 12 months before disability

Income Cover offsets apply to Income Cover and Expenses Cover

Income and Expenses Cover has a payment term restriction that applies for medically unevidenced claims. These are not a fixed restriction for mental health claims

Unevidenced claims in the Income and Expenses Cover are paid for up to 12 months

Fixed payment terms reset for new disability for the Income and Expenses Cover, although customers must be back to full time work for more than 12 months to reset.

Disability within 12 months of claim for any reason is a recurrent disability

Income and Expenses Cover ancillary benefits include Bed Confinement Benefit, Return to Work Benefit, Increasing Income Benefit, Recovery Support Benefit (reduced to 6x SI), and Vocational Retraining and Rehabilitation Benefit (reduced to 3x SI or max $10,000)

Income and Expenses Cover ancillary benefits don’t include Lump sum TPD, Critical Illness Benefit, Specific Injury Benefit, Child Care Assistance Benefit, Death Benefit, and Return to Home Benefit

YRT option only applies.

Moderate Trauma Cover

Partners Life desires to get back to the principle of indemnification meaning that customers don’t need claims paid unless they have financial losses, and they don’t need to pay premiums that doesn’t indemnify against loss

Moderate Trauma Cover allows price efficiency, cutting out claims with immaterial financial consequences. This enables customers to afford higher sums insured.

Moderate Trauma Cover will mean future prices will be sustainable and will allow advisers to fine tune severity based on trauma solutions

Moderate Trauma Cover will have more defined conditions for Alzheimer’s Disease, Dementia, Aplastic Anaemia, Angioplasty, Blindness, Cardiomyopathy, Chromic Kidney Failure, Cancer, Diabetes, Heart Attack, Intensive Care, Loss of Cognitive Function, Motor Neurone Disease and Muscular Dystrophy, Multiple Sclerosis, Severe Rheumatoid Arthritis, Stroke.

Designed to be 20% cheaper than Trauma Cover (TC), price differential expected to grow

Designed to be a mid-range trauma cover (between TC and Serious Trauma Cover)

No built-in TPD, customers that need TDP will need to take TPD Cover.

Moderate Trauma Cover can be combined with TC and STC to create a severity-based trauma option.


Quality Product Research: Proposed rating for Agreed Value Income Protection: Occupational Retraining

Introduction

We continually review the ratings of all our benefits and have renamed “Occupational Retraining” to “Vocational & Rehabilitation Support”. Our intention with this review is to make clearer the difference between the features in readiness for more detailed research reports that are in development. Better describing the current variations and recognising that early intervention has the ability to prevent a client’s disability from escalating further and reduces more severe complications that may lead to a long-term claim – a positive outcome for the client, insurer, and employee.

Please find our proposed sub-items below.

Proposed sub-items 

Irsme

Notes

The monthly payment limit differs between insurers, however the necessity to offset is a similar feature. The major insurers (aside from Fidelity) offer coverage for Childcare Assistance, which is likely to be claimed more often than some of the other expenses. Partners Life receives a deduction for “benefit not available for all payment periods” as they do not offer their “Vocational and Retraining benefit” for payment periods which are less than 2 years. Similarly, AIA reduces their monthly payment to 6 months with 1, 2 or 5 year benefit periods. Fidelity is the only insurer that will not pay out the full benefit until the insured has returned to paid work (minimum of 20 hours). AIA, ASB and Partners Life are the only insurers that clearly offer assistance either during or after the waiting period - an important feature, as early intervention can significantly affect the length of a claim. 

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


Quality Product Research: Proposed rating for Agreed Value Income Protection: Rehab and Home Modifications

Introduction

Following on from our previous post on “Vocational and Rehabilitation Support”, we have also reviewed “Rehab and Home Modifications” and renamed the item to “Home Modifications and Equipment”.

Please find our proposed sub-items below.

Proposed sub-items

Equip

Notes

The biggest variation can be seen in the monthly benefit limits. AIA and ASB have limited their payment to 6 months while Partners Life uses a tiered approach (the monthly payment reduces in line with the payment term).

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


Life price comparison database update

We have updated the life price comparison database, version 113, to reflect the changes to Cigna's pricing, which were extensive. Corporate subscribers should examine the update notes that have been sent with the database and the change report function. Advisers should check out comparisons on Quotemonster to see the effect of the changes which involved some increases - but also some notable decreases - which tended to favour larger cover amounts and the 90 day wait period for IP / MP. 


Westpac Withdraws Gold Term and Gold Disability Income Cover

As of 15 March 2021, Westpac no longer offers Gold Term Cover (death, critical trauma, TPD) and Gold Disability Income Cover (Indemnity Income Protection). Existing policy holders, however, can continue to make amendments (i.e. increase and decrease cover amounts). Westpac Life continues to offer term life, TPD, critical illness and Agreed Value income protection in other products. For further information please click here


Cigna premiums to increase, and more daily news

Cigna has announced that from 15 April 2021 there will be changes to underlying premium rates on Life, Trauma and Disability covers across Assurance Extra, Business Assurance, Business Extra and Agribusiness Extra. Changes to Life, Trauma and Disability cover are a response to feedback and market developments. The price changes represent the changes. The price changes will be applied for new customers but current customers will have the new rates applied on their next premium review date after 15 April 2021. Applications that are submitted  before 15 April 2021 and issued before 15 May 2021 will not be immediately affected by the price changes. All changes are listed below:

 

·     Life cover rates on Assurance Extra, Business Assurance, Business Extra and Agribusiness Extra are increasing by 3% for yearly renewable, 5-year level and 10-year level premium structures.

·     Alongside this we’ve increased our large sum assured discounts for customers with over $500,000 of life cover.

·    Trauma cover on Assurance Extra, Business Assurance, Business Extra and Agribusiness Extra are increasing by 3% for yearly renewable premium structures.

·    Accelerated Complete Disablement Cover on Assurance Extra, Business Assurance and Agribusiness Extra are increasing by 3% for yearly renewable premium structures.

·    Disability covers including Income Cover, Mortgage Repayment Cover and Premium Cover are increasing dependent on factors including age, gender, wait period and benefit period. The increase will generally vary between 1-10%, however in some cases customers will experience a decrease.

 

“We wanted to give you a heads up about upcoming increases to the underlying premium rates on our current Life, Trauma and Disability Cover pricing across Assurance Extra, Business Assurance, Business Extra and Agribusiness Extra.

 

The new underlying rates will come into effect on 15 April 2021.

 

Over the past year in response to feedback, and in line with market developments, we’ve made a number of enhancements to our core Life, Trauma and Disability cover to make it easier for customers to access support when the unexpected happens.

 

These new competitive rates reflect the recent enhancements and will contribute to the long-term sustainability of our products while remaining good value for your customers.

 

For new customers: The refreshed rates come into effect on 15 April 2021 for all new policies.

 

For existing customers: The new rates will be applied to existing customers at their next premium review date from 15 April 2021. Customers will receive notification of their new premiums via the renewal letter which is sent prior to their premium review.

 

Any applications submitted before 15 April 2021 and issued before 15 May 2021 will be honoured at the old rates and will not be subject to the new rates until the first premium review.” Click here to read more 

In other news

FMA: the FMA has issued a public warning to Roger David Gannon of Gannon Insurance

Cigna: Simon Prentice to join Cigna as Business Partnership Manager based in lower South Island

Cigna: Sharon Duffell new Christchurch Senior Underwriter in the New Business & Underwriting Team

Cigna: Multi-Benefit Discount extended until 30 June 2021

 


Asteron Life set to run regulatory webinars, and more daily news

In response to high demand, Asteron Life is set to run three webinars focused on the upcoming regulatory changes. The webinar will walk advisers through the new requirements and will help them understand what they need to do. Asteron Life has noted that templates for the new process will be available. The three webinars will be held on:

  • Monday 22 February at 1pm
  • Tuesday 23 February at 11am 
  • Tuesday 23 February at 1pm

With just weeks to go, this webinar will step you through the new requirements and help you understand what you need to do. Because each FAP and adviser has different information to disclose, Asteron Life cannot provide templates for the new process.

If you haven’t yet thought about this vital requirement or are still a bit unsure, please enrol for this webinar today - there are three available sessions for you to choose from, click here to register for one now. 

In other news

Partners Life: Naomi Ballantyne hosted a digital ‘Fireside chat’ during Level 3 to discuss things happening within the industry

Financial Advice: Financial Advice made a submission on the proposed guidance on the advertising offers of financial products under the Financial Markets Conduct Act 2013

Insurance Advisernet Australia: Insurance Advisernet Australia celebrates its 25th year

AIA: AIA is in search of a qualified actuary with experience in pricing to join on a 12 month contract

Gen Re: Finding a Way Forward for Disability Income Insurance in Australia - Is IDII Functioning Sustainably Elsewhere?

RBNZ interns

RBNZ: RBNZ farewells Summer interns


Cigna announce product enhancements, and more daily news

Cigna has announced that they have enhanced aspects of Income, Mortgage Repayment, Complete Disablement, Trauma and Premium Covers. The enhancements include changes in wording and benefits. The changes were made effective as of 11 November 2020. The changes are designed to give customers more flexibility during the claims process as well as allowing customers with a low-grade tumor or a listed progressive conditions such as Alzheimer’s disease to claim.

“We’ve made enhancements to a number of definitions and benefits across our Income, Mortgage Repayment, Complete Disablement, Trauma and Premium Covers.

Among the changes is the addition of an alternative 10-hour disability definition to our base Income, Mortgage Repayment and Premium Covers. This will give your customers more flexibility when applying for a total disability claim.

The enhancements also include removing the severity requirements on the full Trauma benefit criteria, making it easier for your customers with a low-grade tumor or a listed progressive condition such as Alzheimer’s disease to claim.”

Below is a full list of benefit changes.

“We have made the following enhancements to our Assurance Extra Income Covers, Mortgage Repayment Cover and Premium Cover:

  • Adding an alternative (10 hour) Total Disability definition

Assurance Extra Income Cover, Mortgage Repayment Cover & Premium Cover

We’ve introduced an alternative total disability definition to our base covers where if an illness or injury causes the life assured to be unable to work more than 10 hours a week in their pre-disability occupation, they may still be considered for a Total Disability Benefit. Any income they’ve earned from working within these 10 hours, will be subtracted from the benefit amount payable.

  • Total Disability Benefit & Partial Disability Benefit –Removal of the 14 days & 7 days total disability criteria

Assurance Extra Income Cover & Mortgage Repayment Cover

We’ve removed the 14 days initial period of total disability criteria under our Total Disability Benefit, and the 7 days initial period of total disability criteria under our Partial Disability Benefit. This has improved the claim-ability of this cover, meaning the life assured is more likely to qualify for a claim payment.

  • Total Disability Benefit – removal of limitation for concurrent Mortgage Repayment Cover and Income Cover claims

Assurance Extra Income Cover

We’ve removed the limitation (added in April 2019) under all our Income Covers which reduces the Income Cover benefit after 6 months if the life assured is also getting a Mortgage Repayment Cover benefit for the same disability.

  • Recurrent Disability Benefit – Extending period of recurrence from 6 months to 12 months

Assurance Extra Income Cover, Mortgage Repayment Cover & Premium Cover

We’ve extended the period of recurrence to 12 months under all Assurance Extra Income Covers, Mortgage Repayment Cover and Premium Cover regardless of the selected payment term. Previously the period of recurrence had to be 6 months if a payment term of 2 years or 5 years was selected under Income Cover or Mortgage Repayment Cover.

  • Return to Work Benefit – adding an additional scenario for claim

Assurance Extra Income Cover & Mortgage Repayment Cover

We’ve added an additional scenario for claim, where, if the life assured has been accepted for a Vocational Retraining or Rehabilitation Benefit that resulted in them returning to full time employment or self-employment, they may now get extra financial support under the Return to Work Benefit

  • Premium Cover – Refund premiums paid during the waiting period upon acceptance of a Disability Benefit claim

Assurance Extra Premium Cover

Going forward, if a Disability Benefit claim has been accepted, the premium waiver would be applied retrospectively from the first day of the life assured’s disability. This means that at the end of the waiting period, we will reimburse any premiums paid in respect to coverage during the waiting period.

In other news

Does New Zealand really need four dispute resolution schemes?

Why do so many clients go without income protection?

nib: nib talks 2019/2020 results

 


What could be the IP impact of "long-COVID"?

A back of the envelope forecast for "long-COVID" impact on IP claims: 

Start with cases - about 1,950 if we are considering current known cases, or whatever number your modelling predicts for whole of pandemic. Assuming very good containment, not much more, let's hope it stays that way. The apply your estimate for "long-COVID" I am using 20% at the moment which gives us about 400 cases in New Zealand. But not all of these will be in employment and own income protection. In fact as 42% of cases are 'imported' we can assume that most of those do not own income cover issued by New Zealand insurers. That leaves us with roughly 240 cases. FSC underinsurance research showed income protection cover at about 20% of the market - or a possible 48 cases of 'long-COVID' where a claim may be possible.

Well, well, within the capability of the industry to manage. Economic impacts on people that have claims from other causes are likely to be more problematic. 


Science behind high Income Protection premiums, and more daily news

Recently we reported that Income Protection prices are on the rise as a result of the Australian market and COVID-19. New Zealander insurers are now being urged to amend processes and premiums before regulators intervene and introduction mandatory guides. Partners Life begun the conversation when revealing that it has increased IP premiums by 12% and made policy changes. Kris Ballantyne, chief marketing officer, has said that Partners wishes to offer affordable policies that customers can maintain for as long as they need. AIA and Cigna have both noted that they aren’t looking to introduce significant premium increases.  

“It took insurer Partners Life to break the silence last month when it revealed a brave plan to start publishing the content of discussions with the Financial Markets Authority.

 

In doing so, it revealed it lifted its income protection premiums by 12 per cent in the past year, and had made policy changes, including not allowing self-employed people to any longer select an “agreed value” of income to be covered, instead limiting cover to actual loss of earnings.

 

Partner’s Life’s chief marketing officer Kris Ballantyne said the company was a “first mover” on income protection, driven by wanting to provide policies they [consumers] could afford to keep as long as they needed it.

 

It was a big challenge as there were a lot of agreed value policies covering self-employed people, and owners of small businesses.

 

Neither of its two big rivals, AIA nor Cigna, was expecting to make such large premium increases, though AIA had stopped selling new policies in which the income covered automatically increased by 5 per cent a year.

 

AIA chief product officer Len Elikhis said that over time, “the insured’s benefits would creep up and approach the insured’s income”.

Shane Burdack, senior underwriting consultant as Swiss Re Australia highlighted that customers with significant wealth had very little incentive to return to work when on claim, resulting in increased premium prices.

“Swiss Re senior underwriting consultant in Australia, Shane Burdack, said that in New Zealand insurers gave little thought to the net wealth of policyholders.

 

Yet people with significant wealth – sometimes through investments, sometimes because of payouts from other insurance policies – had a low incentive to go back to work, and stayed “on claim” for longer driving up costs.” Click here to read more

  

In other news

nib: nib takes place among top 100 most diverse firms worldwide

Southern Cross: Southern Cross is offering members a $149 voucher when they join Snap Fitness on a minimum 12-month term

Southern Cross: Southern Cross is offering members 10% off the retail price of a monthly LES MILLS On Demand subscription