As of 15 March 2021, Westpac no longer offers Gold Term Cover (death, critical trauma, TPD) and Gold Disability Income Cover (Indemnity Income Protection). Existing policy holders, however, can continue to make amendments (i.e. increase and decrease cover amounts). Westpac Life continues to offer term life, TPD, critical illness and Agreed Value income protection in other products. For further information please click here.
It is being reported that Westpac Australia is working alongside JPMorgan Chase & Co. to begin a formal sale process for the life insurance business. It is being reported that the sale process could begin this month, with AIA Group, Dai-ichi Life Holdings, and Meiji Yasuda Life Insurance Co. being possible buyers. There is a possibility that the sale may not go forward as sources have noted that Westpac is still weighing options, although Westpac has previously stated that it would focus on banking business by divesting non-core assets.
“Westpac is working with JPMorgan Chase & Co. to start a formal sale process for its life insurance business, according to a Bloomberg report. The sale process could start as soon as this month. AIA Group, Dai-ichi Life Holdings, and Meiji Yasuda Life Insurance Co. are among the firms that have reportedly been sounded out as possible buyers.
Westpac is still debating the sale, and could still decide to keep the business, sources told Bloomberg. If it decides to sell, the bank may seek a premium to the life insurance unit’s net asset value of $1.8 billion – although the asking price will depend on buyer interest.
The life insurance business is likely to see continued pressure on earnings this year, Westpac told investors in November. The unit posted $229 million in income in the 2020 financial year before write-downs, Bloomberg reported.
Westpac said it would divest itself of non-core assets and focus on its banking business after a series of scandals resulted in the banking giant getting slapped with a record $1.3 billion fine in September. Since then, Westpac has sold its general insurance business to Allianz SE for $725 million and its Pacific unit to Kina Securities for around $420 million, Bloomberg reported.” Click here to read more
In other news
FSC: Hayley George joined the FSC in February as Marketing and Communications Manager
QPR database version 139 has been issued to subscribers and uploaded onto Quotemonster. This version includes the following changes:
- Southern Cross - new policy wording effective 09/11/2020
- Addition of Chemo 100 and 300
- Rating changes applied
- Westpac - Trauma Accelerated - Diagnosis and Partial Benefit
Rob Stock, reporting at stuff.co.nz tells us: After Joe Lobban’s death his partner Sam Robertson was informed by Westpac Life that they wouldn’t pay out the $480,000 life insurance claim as the insurer believed that Joe had failed to disclose medical information when applying. After seeking legal help Sam was able to ensure the claim was paid out.
“A year after her partner died of a heart attack, a New Plymouth woman and her two school-age daughters have finally been told by Westpac Life it will pay out on his life insurance.
Westpac Life told Sam Robertson in May this year that it would not pay the $480,000 claim, alleging Joe Lobban had failed to disclose medical information when he applied for the policy in 2014.
It was a blow for Robertson and her daughters who were scraping by on benefits, living in a rented house.
But Robertson, aided by lawyer Tim Gunn, got Westpac Life to reverse its decision, though he said was “unfortunate that this has taken the intervention of an insurance lawyer to have Westpac honour their policy"”
Sam made the claim in May 2019 after Joe died of a heart attack but was informed of Westpac’s decision to decline the claim in May 2020. After Sam’s lawyer Tim Gunn challenged Westpac’s decision, the insurer informed Sam of its decision to pay out the life insurance in July 2020.
“Lobban died in May last year of a massive heart attack, aged just 30.
The fit and active share milker had an un-diagnosed congenital heart condition.
Robertson made the claim to Westpac Life two weeks after Lobban’s death, but it took the insurer until May this year to indicate its intention to decline the claim.
After Gunn challenged the legality of Westpac Life’s decision, it reversed its decision in a letter dated July 14.” Click here to read more
We would like to highlight that we do not know the entire story. Overwhelmingly the industry has a great record on claims, but of course, a few claims can be either paid when they should not, or denied when they should not.
In other news:
Asteron Life: TalkBack feedback programme introduced
In a previous quarterly report we highlighted the case of Ms Earea, after having seen the story published in Stuff. Stuff has now published a follow-up to the story, as Westpac Life has waived her premium payments:
“After Earea’s story featured on Stuff, Westpac Life wrote to her to tell her: “No further premium payments will be required from you.”
“We are concerned that you have been making difficult decisions that involve personal sacrifice,” the letter said.
Earea had a $280,000 terminal illness claim declined by Westpac Life last year, with the insurer deciding her medical condition did not meet the criteria under her policy as it was not a condition the insurer believed would result in her death within 12 months.”
“Westpac Life is standing by its decision to turn down the claim, though Earea has sought legal advice and intends to challenge that.
Earea took her case to the Banking Ombudsman, which found the insurer had a right to decline the claim.”
This is a generous decision by Westpac Life which allows Ms Earea to retain the cover which she was finding difficult to afford. The dispute about the claim may be ongoing. We only have the information in the two Stuff stories to consider, so it would be unwise to comment more on that. In general terms, however, insurers asked for claims on compassionate grounds also consider their duties to other policyholders to only pay claims that meet the product terms and conditions.
Financial Advice New Zealand have voiced their approval of the new disclosure regulations that were announced by MBIE on 25 June 2020. Katrina Shanks has said that new regulations mirror what Financial Advice outlined in their CoFI submission.
“Financial Advice NZ chief executive Katrina Shanks said the new rules had picked up many of the points made in the association's submission.
“The focus of the sector during this process was to ensure the right balance between good consumer outcomes and a financial advice sector which isn’t encumbered by unreasonable red tape and adverse outcomes.
“We support regulations around disclosure made to clients – including on conflicts of interest, commissions and other incentives and disciplinary issues.”
The need for disclosure being limited to adviser fees, the products they offer advice on, their conflicts of interest, commission they receive, and how clients can contact dispute resolution services is something Financial Advice is please about.
““However, we are pleased to see a change from the draft disclosure requirements that now only requires disclosure of these matters when they would likely materially influence a client’s decision. This is something we strongly recommended in our submission to ensure disclosures were meaningful and not overwhelming for consumers.
“We were concerned the draft regulations required disclosure of product fees charged by unrelated third parties (e.g. insurance premiums) so the removal of the requirement to disclose fees for ‘acting on the advice’ was a sensible move."” Click here to read more
In other news:
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
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.
We recently had an adviser ask us this question:
If you are on claim with a bank mortgage cover and your mortgage is repaid during your claim does the claim end before you get to the end of the claim term?
Here is what we found:
ASB – Mortgage and Income Protection, benefit continues after mortgage has been repaid until the end of the chosen payment term.
Westpac – payments will cease if the mortgage is repaid. If disabled after the maximum 30 months and the life assured meets the TPD definition, Westpac will repay the outstanding loan amount. The policy then ceases.
Other banks have either Income based products, or an Agreed Value with a chosen benefit amount (Living Expenses).