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.

FSC Launches new insurance research

The Financial Services Council has launched new insurance research highlighting the gap between typical and ideal cover levels and some significant challenges facing the industry in lifting consumer engagement.

In the media release the CEO of the FSC, Richard Klipin, highlighted the purpose and key findings: 

The study looked at the three main types of life insurance available in New Zealand; life insurance, income protection/mortgage repayment insurance and critical illness insurance. “While 54% of those surveyed agree that it is important to have the right amount of insurance to cover risks including illness, death and job loss; estimates of underinsurance are much higher,” continued Klipin. Critical illness showed the highest level of underinsurance with only an estimated 9% of Kiwi’s being sufficiently insured, followed by 11% who had adequate income protection/mortgage repayment insurance and 29% with adequate life insurance.

Consumer views are included in this introductory video: 

 

Gambling on life 2020-01-22 164052

The research can be viewed here


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

Cancer-stricken business owner struggling to sell Auckland restaurant for third of purchase price

Breast cancer patient Kingna Yu tells her story of struggling financially as she loses money on her Auckland business due to City Rail works taking place in front of her store. She has put breast reconstruction surgery on hold while she waits to see if there is a chance to get compensation for the decline in business. Click here to read more.

This is a desperately sad situation which shows the value of having a buffer against events - and if that buffer cannot be cash, it could be insurance. Of course, there is no way of knowing exactly what this person's situation was - so just to acknowledge that may not have been possible for them. 


Asteron Life - Continous Trauma

Asteron Life have made a claim for real innovation by launching their new continuous trauma benefit. There are some details to get across, and you can read about those in the link below. But the essence of the number of the product enhancement is that with this optional add on, trauma automatically reinstates immediately after a claim.It is the automatic nature that I think is really powerful. I shall be taking a closer look at pricing and seeing how that works. too.

The new Trauma Continuous Benefit came into effect 3 September 2018. Click here to see details:  Download Asteron Life product enhancements from 03Sep2018


UK: 'We have to change the conversation' around illness - AIG Life

[In the UK...] The number of deaths from sepsis have soared, rising by more than a third in two years. Nicki Plews, senior propositions manager at AIG Life says (quoted from cover magazine):

"We need to talk about the prospect of encountering a serious illness like sepsis and raise awareness as our industry wants to be there to help people deal with the impact of serious illnesses like sepsis. It is something that can strike any of us as the UK Sepsis Trust notes 25,000 children are diagnosed with sepsis every year and five people die from it every hour in the UK."

Plews then proceeds to list a number of enhancements to AIG Life's trauma product. Well worth a look for product managers.

Click here to read more. 


Cancer Incidence and Survivability

The news on cancer is both good and bad. The long retreat of infectious disease as a cause of early death means that cancer is a far more likely disorder. Within that great trend there are other trends, national, and individual factors which affect risk. But this is the key from a recent article: 

"Given increasing incidence rates, the average lifetime risk of being diagnosed with cancer has increased from one in three to one in two. However, as incidence rates have increased, mortality rates have reduced, leading to better outcomes overall. The good news is that cancer survival rates are improving: for patients diagnosed during 2010-2011 in England and Wales, 46% of men and 54% of women are predicted to survive their cancer for 10 years or more. However, the cost challenge for critical illness insurers and reinsurers is likely to persist."

The article "Cancer and cost", by Aisling Kennedy, reports on the latest data on the incidence and risks of cancer, at The Actuary.com - and it is well worth a read. 

The implication for individual insurance programmes, I think, is that a good combination of trauma and income protection insurance is ideal. Trauma because it can deliver assistance even before the insured is too ill to work. Income protection because it can provide most of the funds to replace income for a long period of time. 


QPR Database Update

Quality Product Research Limited has just uploaded product research database QPRV108 to Quotemonster and distributed it to subscribers. This version includes the following changes:

  1. Remediation for Special Events item for Trauma for all companies
  2. Remediation Fidelity Cancer Booster Benefit
  3. Remediation AIA

Update for Business Insurance rating. Still being worked on.


Moving stories about the diagnosis of MS

There are some people that don't think trauma cover is worth having - I am not one of them. Their view is that trauma cover depends on a kind of lottery: that the disease is one of those listed as a claimable event. That's true as far as it goes, but doesn't properly acknowledge that of the truly major illnesses you can contract in modern life, modern trauma covers. As a fall-back, most up to date trauma products to include some total and permanent disability benefit. But put that aside, and read these stories describe diagnosis of MS. They exemplify the value of early, partial payments for diagnosis and full payment for the point where disability is being experienced. With a benefit of $100,000 the partial payment - for most adviser companies, and one or two bank versions of the product - would be $25,000. At that point most income protection contracts would not pay out.