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

QPR Database Update

There have been a number of updates done in the QPR database recently (QPRV104) and subscribers now have access to these changes which include:

  • ANZ new policy wording added for Life.
  • BNZ new policy wording added for Life, TPD, IP, and Trauma. Main change to heart attack definition for Trauma.
  • AIA new policy wording added for Life, Trauma and TPD.
  • AIA Business Life and Business Trauma Standalone reviewed (Accelerated is still under review)

Research on Quotemonster also reflects the changes with are applicable.

The top five excuses for not buying insurance

Katie Waters, of Daily Worth has a list of the reasons 'millenials' aren't buying insurance, while I may doubt the value of generational labels, this list struck a chord with me. To read the full list, go read her article, but my favourites from it are: they feel invincible, they think parents are all the back-up they need, and it is on the to-do list - the really long-term one that never gets done. 



FMA: Robo-Advice Exemption Consultation

The FMA has released a paper seeking feedback on a proposed exemption to allow robo-advice for personalised financial advice, on a class basis. You should go to this link to access the information made available. 

The paper has just been released, so requires some time to review and consider, but at first glance we note the limits on robo-advice for insurance purposes, explained by "...concerns that these products can sometimes not be easily exited, and the consequences of failing to disclose material information are high..." Insurance advisers could probably take this as a back-handed compliment: once upon a time insurance was a 'category two' product not worthy of the supervision accorded investment advice, today it is investment advice which may be automated, and insurance that requires a human to execute. Having said that, those of us that work with technology know that robots are better at capturing complex information and ensuring that it is always acted-upon than humans are. We think that the FMA should take into account Jacqui Dean's proposals to reform disclosure laws, and the capabilities of insurance advice systems, when considering this issue. 

Variations in Financial Planning and Legal Benefits

The financial planning benefit usually pays around $2,000 for either financial planning or legal assistance when a life insurance claim is payable. It is a very valuable benefit, usually paid in addition to the sum insured. Given that when someone dies there are always money issues, always legal issues, this helps to ensure that the family gets most of the actual sum insured. But they vary, a lot. 

  • The amount: from zero to $2,500
  • Sometimes the benefit is only for financial planning
  • Others pay legal expense as well 
  • Whether there is a minimum sum insured - below which no financial planning benefit is payable
  • The period in which you can claim

Its for these reasons that scores can vary - quite a lot in this case. 

Positive Attitude and Aging

Can a positive attitude help you live longer? Probably. This post from the American Psychological Association links to research which identifies various correlations between attitude and longevity. Not all of them obvious - such as the higher early death rate for more 'happy-go-lucky' types. Worth a read. They also link to planning for life span. 

Insurance: Ready for an Upgrade

Another high-level look at the insurtech opportunity - but this one is surprisingly readable. Although not all the developments are about insurance as such - some are just the application of tech in a way which bets on direct to consumer, for example, leaving the insurance offer essentially unchanged - the most interesting are the ones which hack away at core costs: ledger, identification, underwriting, claims. Link