March peaks interest in comparison

An all-time record high of 2,504 users on quotemonster.co.nz in the last 28 days confirmed that it was a very, very, busy March. More advisers than ever are interested in comparisons. Advisers tell us that consumers like comparisons. Guidance around replacement advice requires that either a comparison is done, or the risks of proceeding without having done a comparison are explained - for example, in this report. It seems that advisers, regulators, and consumers all agree that comparisons are an essential part of financial advice. This situation is dynamic - you cannot form a view and then keep expecting that to hold true - every quarter, on average, four insurers change the pricing for eight product lines and the policy wordings for five product lines. So if you haven't compared, how can you be confident in your recommendation? 


Quality Product Research: Inflation Adjustment item update for Life Cover

Introduction

Inflation is often overlooked when customers are looking to purchase Life Cover. Although it may not be necessary for short term policies, it is however, a valued feature for long term policies (i.e., those that are in place for 20 years or more). 

Sub-items rating review

Hello

Following up on adviser feedback, we have recently added the optional Inflation Adjustment feature to MAS increasing the accuracy of our rating for Life cover for this insurer.

Please note we currently only show the pricing difference between indexed vs non-indexed (as shown below) and the rating for optional items are excluded from the total rating you will see on your research report.

Lol

Notes

The Inflation Adjustment benefit does not significantly vary among providers. Companies differ in expiry age, with Pinnacle being the only that expires at age 60. ANZ bank seems to be the only provider with a deduction for the sub-item “Excludes when premiums are waived”. A significant difference is whether the benefit is optional or included.    

Why is this important?

The benefit would be of high value for those looking to purchase long term policies. To not have this option would have a great impact in the future as you would understand that the cost of living will only increase as time goes on (and so should our Life cover). 

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: 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


Quality Product Research appoints new General Manager

We are pleased to announce that Treena Jordan has been appointed General Manager of the team at Quality Product Research Limited. Treena has an extensive background in product development and is extremely adviser focused. Over the last 20+ years Treena has worked for AIA, Sovereign, and Cigna as well as life insurers in both Australia and New Zealand.

Due to the increasing scrutiny with the new regime ahead we believe it is essential to grow our resources. Having Treena on board now means that we will have two full time product experts in the team. Treena has substantial experience working with advisers and is a very industry-focused person. Her involvement working with advisers around business insurance will be extremely valuable. Those of you that have worked with Treena in the design of business insurance products will be aware of her passion for good insurance cover.

As part of the change in team you can expect to hear more from Doreen and Treena  as they are keen to hear from you about your experiences with our product providers and how you use Quotemonster, Research Reports, and Advicemonster.

Treena


IP ratings under review

Product scores for income protection products are under review. We need to consider how to take into account temporary measures being applied to contracts with some disablement components - IP, Trauma, and TPD - such as the recent restrictions being applied by Partners Life. In the meantime, you need to familiarise yourself with what those restrictions are and whether they apply to the cases you are submitting. We have a schedule of COVID-19 impacts available for subscribers in the quarterly life and health review, which will be issued today. 


Product Research

The Quality Product Research database V130 has now been distributed to all subscribers. This version includes the following changes:

  • Southern Cross and nib added to Standalone Trauma
  • Partners Life documents and rating update V14.5 – effective 09.12.2019 (personal and business)
  • Fidelity Life remediation of booster benefit

Asteron Life: Changes to Mortgage and Living Cover

Asteron Life have announced a number of changes to their Mortgage and Living Cover, as well as the ability to quote it alongside Income Protection.

As of Monday 9 December Asteron announced they have introduced:

  • The ability to combine Mortgage and Living Cover (MLC) with Income Protection (IP)
  • An optional Ten-hour benefit on Mortgage and Living Cover
  • Enabling bundling discounts across Personal and Business
  • Adding level Life Cover projections to age 100

Here is an example of combining Mortgage and Living Cover with IP: Combining MLC and IP may be suitable for clients who want the advantage of not offsetting ACC benefits as well as some tax deductibility of premiums; or for self-employed clients who could manage basic oversight of their business in less than 10 hours a week; or for self-employed clients who are used to meeting regular tax obligations.  

Here you can download a case study helping explain the optional ten-hour benefit on Mortgage and Living Cover. Download MLC Case study

 

 


Partners Life announces a long list of product enhancements

Partners Life has an impressively long list of policy wording changes made. Arguably, each of the individual items is small, and some merely clarify, but in sum the changes are significant, and clarity is good and should always be an aim. I particularly liked the change to the intensive care benefit, as an example, as I saw a particularly unfortunate claim where the client failed to meet the strict definition, but should have qualified. This change makes that unfortunate circumstance less likely. I also liked the changes to definitions of income and full time. The addition of the change to include removal of a major portion of the colon is a valuable addition to the loss of a major organ schedule, and increasingly common in the case of bowel cancer. 

You can find full details of the changes at this link here.

Partners Life have released this video summarising some of the most significant product changes made effective 9 December.


Product Research Database Update

QPRV12_9 is now live, this version includes the following changes:

  • Updates to policy documents and ratings for the below:
  • Accuro SmartCare ACC7124 08/2019
  • Accuro SmartCare+ ACC7125 08/2019
  • AMP RPP NZPD00291 TraumaPlus 2017
  • AMP RPP NZPD0305 Trauma 10/2019
  • Asteron Continuous Trauma accessible through TBB

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. 

Click here to read more.