End of Life Choice Bill coverage focuses on insurers... it probably shouldn't

Katrina Williams, writing for stuff.co.nz has a piece on how life insurance companies may have to decide how to cope with the new End of Life Choice Bill if it becomes law.

The first thing to be clear about is that life insurers are bound by their current contracts in the marketplace. I don't think that the article is as straightforward about this as it should be - it therefore raises doubts about claims payment under current contracts that are not really there. As one insurer in the article relates, most insurance policies cover suicide provided that the policy has been in force for at least 13 months and there was no evident intention to defraud the insurer. 

Another point to note is that end of life choice typically happens in old age. Although the debate about euthanasia tends to highlight extreme cases - like cases of severe illness in younger people because of the tragedy of them - these are rare. When you examine these cases more closely they are often (although not always) as a result of long-pre-existing disorders, sometimes congenital. Few such people own life insurance, and few people hold life insurance into very old age where most end of life choices are likely to be made. The actual number of policies affected is likely to be small, and in most cases, these claims are being met already under payments for terminal illness, and eventual death, whatever the exact cause.

Insurers are conscious, also, of the risks of commenting on a subject where views vary considerably and feelings are strong. The business of an insurer is insurance, not political advocacy. Whatever the views of individual executives might be, their shared project is the business, and they are conscious of that particular, defined duty to their clients. That is evident in Richard Klipin's response, as CEO of the Financial Services Council: 

"The life insurance industry and individual companies will work in a careful, considered way to review policies to ensure that they remain fit for purpose, in line with international best practice, and continue to provide the support and coverage that New Zealanders expect," 

There are wider implications if the Bill becomes law. Product design must consider moral hazard, which may be slightly elevated in the case that a decision to end one's life is more acceptable and legal. These challenges, however, are usually successfully navigated in this market, as they have been in other markets. The existing moral hazard of the incentives to fraud and murder are very well managed by New Zealand insurers through the underwriting process and through the law. There are many issues to consider in the End of Life Choice Bill debate, but how insurance may operate is not the most important. 

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Thoughts on Susan Edmund’s Starting out Starting over

Susan Edmund’s Starting out Starting over is made up of different chapters that are dedicated to the different stages of a single woman’s life. Edmunds’ ability to simply relate finance to the lives of single women works to capture and hold the attention of readers. When beginning the book, I was a little worried that I would be left feeling overwhelmed, but Edmunds tackles the broad and complex topic of finance in a manner that is easy to follow, thought-provoking and entertaining. Her ability to address issues relating to debt, home purchases and other investments, love, insurance, and retirement worked well to offer readers a complete guide. Focusing on areas that are generally major events in any person’s life helped to put a lot of things into perspective.

A theme that ran throughout the book was the incorporation of case studies. All case studies worked to further illustrate a point that Edmunds was trying to get across to readers. Although the points were easy to understand, the use of cases studies made the book more personable. I found that aspects of the characters described throughout the book either related to people I know or myself. Although alarming at times, these case studies helped me to objectively assess my tendencies and experiences and to quietly evaluate the tendencies, current situations, and past experiences of women close to me. Upon completion of the book, I felt that the case studies served a dual. The first was to illustrate points made, and the second was to help readers examine their situation, experiences, and habits. I believe the use of case studies is a well-thought-out and a well-designed approach.

Another aspect that I found highly effective was the simple exercises that readers could complete. Through the integration of activities, I was able to use the material that I was reading to critically evaluate my situation and my mindset. Although difficult at times, this aspect of the book is what I found to be most helpful. Having these questions throughout the book meant that I was able to honestly answer without fear of judgment.

To conclude, Susan Edmund’s Starting out Starting over is an informative book that helped me to better understand finance and to be brutally honest with myself. I was able to better understand financial elements that are key to having a successful financial standing. Edmunds straight-forward approach worked well to get her points across in a manner that leaves readers aware and hopeful.

Review by Jerusalem Hibru. Image of Susan Edmunds, supplied.



Susan edmunds

 

 


How sales incentives can distort the advice of insurance companies

I don't like this headline, but the trick with this kind of information is to try and figure out why it was written, rather than spend ages grumbling about how wrong it is. In fact, this is the headline for a long-form essay on conduct issues in life insurance. While I do not agree with some of the things in the article, it is overall a good introduction to the subject and covers it well. You should take a look. Click here to read it.

Now back to our challenge - that for many people insurer and adviser are synonymous. Read this quote and absorb it again:

'Life insurance providers are under pressure to disclose sales incentives, which can affect their advice and are banned in some countries. But the industry is resisting.'

I added the emphasis on the word 'their' myself. Plainly the insurer is seen as being responsible for the advice that an adviser may give. For some, they are, for others, of course they are not. This is a significant issue for insurers and advisers that wish to provide excellent experiences for their clients. Being clear about the service you provide, and what you are (or are not) responsible for, is essential to managing your advice and conduct compliance obligations.


nib health journalism scholarship winners announced

Barbara Fountain won the nib senior health jounalism scholarship at the recent Voyager Media Awards and picked up the $6,000 grant towards travel, research and interviews.

'Judges Donna Chisholm and Lorelei Mason said Fountain’s proposal to investigate secrecy at district health boards was a standout. They were impressed not only with her strength of writing but her proposal to investigate DHB accountability – “an area where sunlight is sorely needed,” they said. “She has the experience in health and depth of knowledge to pull it off.”'

Click here to read more.