Forbes Magazine has and excellent article - well worth the read - here's the synopsis:
"French insurer Aviva wrote a life insurance contract which allows policy holders to switch funds this Friday based upon the prices of those funds last Friday - which was fine and common back in the 80s and 90s but since then there have been a few technological advancements which allows us to look up asset prices in seconds. Many policy holders noticed this and started aggressively managing the savings in their funds and thought if I can trade today (Thursday) on last Friday’s prices I’m likely to do pretty well.
I said it gets better: and it does. Herve-George (a policy holder) is, under the terms of the contract, allowed to add more funds under the original terms of the contract. He’s made arrangements with a hedge fund or two (who wouldn’t like 70% per annum returns?) to inject perhaps a further €20 million…."
Click here to read full article.
Rob Stock details the traditional insurance life-cycle in a recent column at stuff.co.nz. This is a good start and may make sense for many people as they contemplate how insurance will work for them. That qualification is deliberate.
I say 'many' people because there are plenty of people to whom this life-cycle will not apply, including people that: do not get married or have one life partner, do not or cannot have children, get married but divorce, their partner dies, they re-marry, they are in a same-sex marriage, they re-start their career, or they change country, and so on.
Because life is more complicated than the story-books there are often situations which require a more complicated answer. Planning for the allocation of inheritance to children from previous relationships equitably with a new partner and further children, plus managing the financial implications of second and third careers are the two most common situations, but there are many, many others.
At Quotemonster we recently received a requested from a QPR subscriber for a comparison between Partners Life and Combined Insurance for their Trauma products.
An adviser north of Auckland wrote to us about an existing client "these people have $100,000 Life & Trauma plus full medical and they are wanting to cancel the Trauma cover in favor of some combined cover". The existing cover was with Partners Life so we carried out a comparison with the Combined Insurance document provided by the adviser and found significant differences in the very limited conditions they covered.
We later received an email from the adviser "Thank you for your evaluation of the Partners Vs Combined as I was able to show the client the glaring gaps .... They were very impressed ... as well as the fact I had gone to an unbiased third party for advice. In other words I was able to save their Trauma cover."
Please get in touch with us if you have a story about how product comparison has made a difference for you.
Seth Godin lists six points of things that people should do or ask themselves before referring someone or something to friends and family. It neatly explains why you don't get as many referrals as you would like - even when people like your service. By extension it probably explains why you aren't asking for enough referrals.
Correspondingly, you should consider the social media 'like' or 'heart' a very soft method of indicating preference. This is not as intrusive as a hard referral but it has led to the fastest adoption of services humanity has ever seen - so there might be something in that.
Advisers considering engaging in telemarketers and agents should check out the resources at the Commerce Commission on telemarketing and agents, but a good summary is given in this video.
For an overview of the recent history in medical insurance product development. Including a discussion of medical insurance comparison issues check out our latest presentation on Slideshare.
Insurance advisers compiling their own comparisons, or those creating advertisements based on comparisons, should check the Commerce Commission guidance on comparative advertising. Link.
Policy upgrade features, the practice of updating in-force policy terms and conditions with upgraded features is relatively new. Some long-standing providers have only but recently adopted it. Due to the gradual incorporation of this feature by companies that distribute through primarily through financial advisers, many have shadowed competitors’ policy wording, and an increasing number of in-force policies now have the same terms as those issued new. Also, many benefit terms and conditions are very similar.
There are however two fundamental standards to consider:
- When did the upgrade benefit come into effect; and
- To what specified policy issue date (if any) does this benefit retrospectively apply.
We have summarised these in the table below:
For those companies with pass-back provisions extending to 2001 as a proportion of in-force books only a small minority of policies in-force will have products that do not auto update, but these will still number in the tens of thousands.
Most providers choose to extend this feature only to policies issued since the feature was introduced. Moreover, where the feature has been ‘passed-back’ to existing policy-holders, a limit has been fixed to how far back it applies. Consequently, the oldest in-force policies may be excluded from qualifying for this feature. Insurers have maintained this is a result of contractual obligations with reinsurers wherein older policies were approved on the basis of different terms and conditions than to those of newly-issued ones. Valid though it may be - insight conveys that clients who have been paying premiums for lengthy periods are, perhaps, disadvantaged. On the other hand some of these older policies retain some features that may not be available in a modern policy.
Outwardly the upgrade policy wording benefit emerges as a generous feature accentuating insurers’ commitment to recompense the loyalty of policy-holders. However, it also serves a purpose of synchronising existing products’ content with developments in the macro-environment. An insurer benefits as much as existing clients from the upgrade benefit, which enables insurers for example to:
- curtail anti-selection (where the healthier lives in an in-force product abandon it and update their cover with a competitor, leaving only an aging in-force client base)
- consolidate IT platforms where all system developments designed to manage enhanced products can also accommodate all in-force clients
- eliminate varied pricing segments for the same products - facilitating a streamlined pricing strategy
- avert excessive administrative costs which can spur from mass policy conversions by existing clients wanting enhanced products
- simplify operational processes by transferring older policies to current terms of administration
- relay consistent brand messaging and product-related publications
Nib's pricing changes to their Ultimate Health and Ultimate Health Max products effective 1 April are now live on Quotemonster.
Partners Life have added several benefit enhancements to their existing products which were effective from 1st April and will be automatically added to existing clients' policies.
Here is a breakdown of the changes:
Life and Life Income Cover
- Repatriation benefit has been added
- Partial Payment - the 90 day stand-down period has been removed on a number of conditions
- Sick leave entitlements earned prior to disability are not offset
Income Cover, Mortgage Repayment and Household Expenses Cover
- Changes have been made the the Fixed Payment Terms
Mortgage Repayment and Household Expenses Cover
- TPD Booster Option now available
Private Medical Cover
- Changes to excess rules
- Changes to Surgical and non-surgical hospital admission for Cancer
- Changes to Overseas treatment benefit
- A few changes to a number of items
These changes are likely to be reflected on Quotemonster in the next couple of weeks.