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


Underwriting Mental Health Conditions

Jenée Tibshraeny at interest.co.nz has written an excellent article on the issue of insurers underwriting people with mental health conditions. I think Tibshraeny does a great job of explaining the consumer position - even advocating for it - while explaining the industry position too.

There is a gap. Some people with mental health conditions may not be treated fairly in the underwriting process, and recent events are, maybe, changing the environment, and insurers are slow to change. They must be, insurers need good data before changing their views, or else they may be exposed to lots of new claims. In Australia there is a problem with income protection, and mental illness is contributing to that. For a complex issue to get covered in this way is both important and rare. I was glad to see it done so well. You can read the article at this link.

Stephen Potter, head of underwriting at Fidelity Life, did a great job of explaining the underwriting process, and in so doing, explaining how it is really good to have an adviser involved. 


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. 


An Insurance Perspective on Mental Health

As it is Mental Health Awareness Week in New Zealand here is an interesting article on the insurance perspective of mental health written by Len Elikhis from Sovereign.

'Sovereign’s disability income claims data shows that mental health issues tend to require more recovery time than other health issues. About 50% of mental health claims remain open one year into the claim. This compares with 15% of injury clams and 35% of illness claims.'