Partners Life: Underwriting for COVID-19 financial risks

Partners Life are remaining open to new business during this uncertain time of COVID-19 but have announced a number of restrictions to IP, MP, and TPD, while placing a minimum 6 month stand-down for eligibility for Premium Holiday and Policy Suspension claims. Stating ‘As soon as we are able to remove these restrictions for new business, we will contact those advisers and clients affected directly to review and/or remove these restrictions for any policies issued during this interim period.’

Here is more information:

  1. No new Loss of Revenue Cover or Variable Loss of Revenue Cover benefits will be issued. The cover will be deferred.
     
  2. No new Agreed Value benefits based on Income will be issued. This includes Income Covers, Mortgage Repayment and Household Expenses benefit which are to be based on income. Indemnity Loss of Earnings Income Cover will be offered as an alternative by way of Offer of Terms.
     
  3. MRC and HEC based on actual mortgage repayments and expenses will still be allowed.
     
  4. Disability benefits of any kind will have a Mental health exclusion applied by way of Offer of Terms. This includes lump sum benefits which cover disability such as TPD, Trauma Cover and Hybrid Business Benefits.
     
  5. Disability benefits of any kind will have a restriction for disability first arising while a life assured is unemployed or is on a period of leave without pay. This includes lump sum benefits which cover disability such as TPD, Trauma Cover and Hybrid Business Benefits.

    These lives assured will instead be considered an Occupation Class 5 immediately they stop work rather than after the usual 12 month period. This restriction will be achieved by way of an Offer of Terms.
     
  6. All new policies to be issued will include a minimum 6 month stand-down for eligibility for Premium Holiday and Policy Suspension claims. This restriction which will be achieved by way of Offer of Terms.

Product and pricing changes for OnePath, nib, Asteron Life, Southern Cross, AIA and Sovereign

An absolutely huge couple of weeks of changes: 

Pricing:

  • Updated OnePath Mortgage Protection Prices effective 1 July
  • Updated nib health prices effective 1 July
  • Updated Southern Cross health prices effective 1 July
  • Updated Asteron Life and Trauma rates effective 1 July

New Features:

  • Needs Analysis – added Standalone and Accelerated options for existing Trauma and TPD insurance
  • Research report – added a new page at the end explaining the QPR Research methodology

Research:

Completed a big set of changes, with some quite substantial shifts (see more posts later today and next week)

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Eligibility rules:

  • OnePath - Income Protection, Mortgage Protection and Trauma - changes in entry ages
  • OnePath - Income Protection - age limit changed

TPD Claim - it takes time, but its worth it

Anand Srinivasan provides us with some more detail on the recent article we recently wrote here.

It took me over 15 months to get this claim paid out from an initial decline, the key reason for success was every party played the role.

If someone thinks TPD will be paid out after 90 days wait they are sadly mistaken. 90 days is the wait period for being eligible to lodge a claim. Getting TPD out it is a different set of requirements and I feel very lucky to have experienced this journey so early in my career as an adviser.

My client went through the umpteen tests cross questioning and verification. It was not easy but same time it was not difficult because I knew there was light at end of tunnel. The one thing I learnt from this journey was the value an adviser brings to the table at claim time.

Insurer looks at adviser for right information and evidence. Client looks at adviser to give confidence that claim will be paid at some stage if they follow they comply. The reinsurer have to come to party so everything needs to stack up.

While as an adviser I was managing the insurance company expectation, my client Darrell managed the Doctors, Specialist, Occupation Physician, ACC assessor etc. No one person can claim credit  for getting a TPD payout everyone has to give their 100%.

A great outcome indeed which cements my faith that I will continue to be an adviser for a long time because it works.

I have another adviser who has been in touch saying that a client feels that the requirements to prove their TPD claim are too hard, and the insurer is deliberately trying to discourage them - and perhaps has no intention of paying the claim. I don't think that's true for most claims - but in fairness to other policy holders they have to be careful before they hand out claims payments. The case above was for more than $600,000.


A great TPD claim story

A superb video about a successful TPD claimant, who was a drainlayer. I hear a lot that people say TPD doesn't pay. I think that there is a lot of difficulty getting TPD claims paid - both for insurers and clients. Insurers do have to make sure of the eligibility for claim in fairness to other policy holders. The client has to keep going through a barrage of tests and assessments over a long period of time - that can sometimes feel like they will be endless. All that suggests that the role of a professional adviser is crucial. when it works well, it works like this video. Something Anand Srinivasan, of Brisk Insurance, can be proud of.


QPR Update V106

We have recently distributed the QPR database to subscribers and have also updated Quotemonster with the following changes:

  • BNZ - Policy Amendment 1 Sept 2017 Life, TPD, Trauma and Income Protection
  • Fidelity Life Policy Wording updates. No rating change
  • Exclusion Definition review of all products

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.


UK: Catastrophic injury compensation, massive payments required under new rule

The UK has a revised the basis for a calculation of the payments required for catastrophic injury, resulting in a massive hike in the amount required. The changes proposed are interesting in themselves, but they remind me of the issues when planning TPD requirements. 

First, the UK: the Financial Times has a good review of the issues, but briefly, the expected rate of return is a factor when calculating the amount of lump sum compensation that can be ordered by the court (remember, no ACC). The rate has fallen from 2.5% to -0.75%, because negative real rates of return have been the norm for so long in the UK. That means that for a young person completely incapacitated the required payment rose from about GBP 8million, to GBP30million. It may not stay there, the insurance industry is arguing against the change. 

The direct planning lessons for New Zealand are limited, but the differences are helpful. ACC must, obviously, be taken into account - but this varies with age, as well. Total and Permanent Disablement from non-accidental causes at young ages is quite rare, but at older ages more common. TPD requirements are likely to outstrip life insurance requirements considerably, even after taking other compensation into account. Standalone TPD should probably be the norm. I was talking with a couple of advisers about this recently, and the folks at quotemonster have had it on their list to change for quite a while - they plan to get it done within the next couple of months.


Recent Product Updates

We have just uploaded the Quality Product Research Limited database QPRV10.1 to Quotemonster and subscribers. This version included the following changes:

ANZ Trauma Cover:

Policy wording also updated to the most recent document in the database, standalone cover.

ASB Mortgage Protection Review:

Review & change made to Offsets / Mental Health Limitation / Partial Disability provisions

Asteron Life

Enhancements of Trauma, TPD & Mortgage Protection for Business and Personal  products (effective 19 June 2017)

Kiwibank Mortgage Protection Cover:

Product has been rated & policy wording uploaded to database

Westpac Trauma (accelerated only)

New score added under ‘Diagnosis & Partial benefit’ to capture ‘minor heart attack’

Sovereign Critical Illness 

Updated pricing is being tested and will be applied to Quotemonster by tomorrow morning. The policy wording for these product enhancements has not yet been reviewed and will be reviewed and updated by 26 June, the QPR database will be updated again during that week.