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

Trauma Product: BNZ LifeCare changes, but severe heart attack definition remains limited

BNZ made a number of changes to their LifeCare products on the 1st of September. Critical conditions such as benign brain tumour, major head trauma and out of hospital cardiac arrest have been added to their Critical Condition benefit. However, the severe heart attack definition remains tough by industry standards with a requirement to meet at least three of four defining factors or alternatively have a substantially ventricular ejection fraction. A couple of exclusions have also been removed from some benefits including an exclusion for war and one for HIV. Click here to read more.


Trauma Sums Insured Chosen

The table below shows the trauma sums insured selected. There are some details about the data below, but in summary you can quickly find the most commonly chosen sum: $100,000, following by $50,000, and then $200,000. Although a better interpretation might be: for the population as a whole, most people don't buy trauma. If you look at the cluster of quotes around $50,000 then most people choose much less cover than $100,000, a few choose $100,000, and the rest choose the same cover as their life sum insured. 

 

Trauma sums insured

The chart shows the value selected by for either the only client, or the first client of two, where there are more than two clients. Although the scenario may be crunched several times the value is taken from the most recent crunch, because that is expected the be the iteration closest to an application if that eventuated. It is only for crunches in the quarter to the end of March 2017 on Quotemonster, it includes trauma sums insured from any combination of benefits which included trauma. 

 


TPD in Trauma - valuable protection, for insurers and clients

Most insurers do not include TPD in their standard trauma, allowing it either as an 'add-on' or expecting that if it is wanted, it will be chosen from the menu of available benefits - after all, virtually every insurer offers it. To some extent, I know why this is, and appreciate it. In the hands of a competent risk adviser it makes it easier to set TPD levels according to the needs analysis, instead of first having to go through the fiddly business of deducting the TPD found in Trauma and IP. But claims like this one underline that this isn't market practice. We know that one of the most commonly sold packages of benefits is life and trauma. Including TPD acts as a back-up - a rare disorder that is extensively disabling then doesn't have to be declined, a payment either can be made, or will be in prospect if the condition worsens, it helps to improve the perception of fairness. Of course, things would have been better still if income protection had been sold. 


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.


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. 

 

 


Another Approach to Life Sum Insured Calculation

Here is another approach to life sum insured calculation. I quite like the cut-to-the-chase simplicity of it, and the recognition of the practical implication of a low inflation/low return environment - the discount to the lump sum required to provide an income is not so big these days. 

What does bother me is the focus. Life, life, life. Where is TPD, IP, and most crucially: Trauma. While setting IP sums insured is relatively straightforward given the twin caps of insurer maximum and client budget, setting trauma sums insured is a lot harder to manage. The 'buy as much as you can afford' argument runs into too much trouble, too quickly: what you can afford is shaped by the argument you make for having it, which comes back to the hunt for a simple, yet strong, basis for how much you need. 

Recently one adviser said that in discussion with an oncologist they felt that it took two years in more than 90% of cases for the client to either recover or to progress to a terminal stage with most serious cancers - which form the basis for between 40% and 65% of all trauma claims. That seems like a good place to start, and the way to approach the client? "What would you like to be able to do during those two years? How much would that cost?"