Resources for Advisers: writing a last letter

You may sometimes have to work with a client or a friend who is dying. Writing a last letter while you are still well and able to remember, to write, and to deal with the inevitable emotional pain may be a valuable experience. The New York Times has this interesting article on the subject. Link

10 Questions to Ask When Choosing a Financial Adviser

According to these are the 10 questions to ask when choosing a financial adviser. Although focused on investment and the United States, one question that caught our eye was 'can I see a copy of a plan' - in essence, what does your written advice look like? Like photographs of houses your builder recently worked on, or pieces in an artists' portfolio, evidence of skill is a very reasonable request. In my list it would probably have ranked second after checking licencing and qualifications. If a customer asked to look at your last report to a customer - with personal details removed - would you be happy to show them?

Killer Furniture

What are the risks posed by the furniture around you? Seriously: falls from beds, chairs, ladders, and steps are rising because of an ageing population. Before you click on the link ask yourself this question: which type of fall accounts for more deaths? I bet you won't get it right. Link. This data comes from the United States, but I doubt that the trend would be much different here. 

Disabled Teen Assaulted by Airport Security Staff

A 19 year old disabled woman was injured during a violent arrest by security staff at the Memphis International Airport. Hannah Cohen was returning home after receiving a final round of radiation for brain cancer when she set off a metal detector at a security checkpoint. Read more here. Easily confused and angry at being detained she was allegedly injured while being restrained. After spending a night in jail a judge was shocked to see her injuries, discharged her and refunded her expenses. 

United States: Medical Insurance Regulation and the problem with Critical Illness Insurance

US regulators are worried about consumers thinking that critical illness insurance is, in fact, a kind of medical insurance. While that may sound like some regulatory make-work I bet that it was not a conclusion they reached on their own: they probably saw some businesses describe it in such a way as to suggest that it is like medical insurance for critical conditions. Link.

Of course, what it also suggests is that there is a continuum, with GP medical expenses at one end and lump sum payments as a form of compensation for incapacity at the other. Critical illness sits between incapacity and payment for medical treatment for major illnesses such as cancer (which accounts for a majority of all critical illness claims). 

United States: Academics Question Financial Literacy Strategy, Recommend Advice

Some academics question the drive towards helping consumers increase their financial literacy as a strategy for generally improving financial outcomes. Instinctively I do not like this idea. One habit I have is trying to reverse the position - in this case by asking, 'would more financial ignorance help?' Somehow the answer seems obvious - no, of course not. But the author of this new paper is making a point about a certain threshold above which the gains from financial literacy are not worth the effort. At some point you are better off getting advice. This is the key sentence from the abstract:

"Consumers generally do not serve as their own doctors and lawyers and for reasons of efficient division of labor alone, generally should not serve as their own financial experts."

I have often used the phrase "be a good shopper" when talking about how consumers need to be careful with any purchase process - financial services just as much, if not more. But there are limits to the ability of all customers. Our compliance adviser likes to remind us of this by talking about consumer "capability and preference." Financial literacy is a component of consumer capability. Put another way, should every consumer get a level five qualification in order to make their own insurance purchase decision? No! An adviser can efficiently share that cost across hundreds of consumers making thousands of decisions.

United States: RGA Re on Group Insurance Use of Electronic Underwriting Tools

If you are frustrated at the pace of uptake of electronic underwriting in the individual market then you should consider how different New Zealand practice in the group market is from the US. RGA Re has this survey on group insurance use of electronic underwriting tools. Link

Issues with Assisted Suicide and Estate Planning

Later this year California will become the fifth state in America to legalise some form of physician-assisted suicide. This article on LifeHealthPro discusses the possible issues that could arise and how it will interact with life insurance policies.

Fixed Term Life Cover Enables the Coverage of People with HIV in the United States

This article on LifeHealthPro website explains that last month Prudential Financial began offering 10 and 15 year term life insurance policies to people living with HIV.

This is interesting. Essentially these folk have figured out that in very many cases people treated with the current basket of retrovirals and other tricks can live a long time with HIV. What is even more interesting is that this approach could be used with all sorts of other forms of long-term, chronic, disorders that will probably shorten life, but can be managed for a long time. I wonder if this approach could be adopted more often in New Zealand if we did not have such a fixation on a product which is, in effect, renewable indefinitely - but actually held for much much shorter periods. By removing the right of renewal at a fixed and known point coverage can be issued for lots of people, and they can get on with their lives in the meantime.