The most interesting change in the overall package is a new discount structure. An old discount structure mainly focused on income protection and mortgage protection benefits has been removed and a new variable discount structure of up to 12.5% has been implemented covering life plus Trauma, Income Protection, Health, and TPD. This probably provides more incentive to broaden the cover base for a client across a range of covers, and offers at least some discount to those that choose not to take Income Protection, which is a substantial majority, sadly.
Other pricing news
- the policy fee (on which no commissionis paid) has been increased from $6.95 to $7.95.
- the base rate table for Income Protection mortgage cover has changed
We will review the full impact of the pricing changes in the premium comparison tool for insurers. The pricing will be live on the 12th of October on Quotemonster.
New Product Names
AIA will be renaming product set to REAL before each product name. e.g. REAL Life Cover, REAL Trauma Cover. The Product naming will be launched 30 September and rolled out over time
New Health Product: REAL Health
- AIA is launching a new Health Product called REAL Health
- Premiums are calculated on a Yearly Renewable Term based on Age, Gender and Smoker status.
- Individual premiums apply for each Life Assured, including for each child. A dependent Child will become subject to adult Premium rates on the next Policy anniversary date after they each age twenty one (21).
Pre-launch and Enhancement of Product: Loss of Earnings Premier
- ‘Premier Income Protection’ is being re-launched as ‘REAL Loss of Earnings Premier’
- Product has been enhanced:
- Enhanced pre and post disability income wordings
- Added Optional Involuntary Redundancy benefit
Total and Permanent Disability Cover Personal
- New to age 70 option
- Quote either to age 65 or to age 70
- from age 66 – 70 definition based on activities of daily living
- New Special Events Increase option for Residential investment properties
Total and Permanent Disability Cover - Business
- New to age 70 option
- Quote either to age 65 or to age 70
- from age 66– 70 definition based on activities of daily living
Life Cover – Level 15/80
- Allow accelerated Trauma & TPD with Level 15/80 Life Cover.
Mortgage, Income and Rent Cover
- Optional CPI added to all options
- AV, Indemnity, LOE Premier • Optional involuntary redundancy benefit for IP AV, Indemnity, LOE Premier – New benefit
- 6mth benefit period
- 6mth stand down period from Policy Commencement Date
- Payable after 30 days of unemployment
- $2,500 or your sum assured whichever the lesser
Trauma - Personal
- New inbuilt children’s trauma benefit
- 20% of Life assureds Sum Insured up to $50,000 whichever is the lesser.
- Keep current optional benefit - $75,000 / flat fee
- Change ‘Optional’ to ‘Top Up’
- If top up benefit selected $75k is in addition to the in-built portion - maximum benefit of $125,000.
- Added conversion option for children turning 21
All the product changes are being rated and will be reflected in AIA product ratings from 12 October.
It has been a very busy time for product changes. In overview we have seen the following changes implemented in a rush in the last few weeks. Some only become effective later this month, but have been announced. Here is a summary list:
- AIA - A whole range update including new names, products, features and new pricing
- ANZ - Technical: the only significant change was the addition of triple vessel angioplasty to trauma
- AMP - Additions to trauma including partial benefits increasing from 10% to 25% of sum insured
- Fidelity - New level life product with extended terms, level riders (trauma and IP) and more
- nib - Upgrades including guaranteed wording, pass-back, and non-Pharmac drugs at home
- Sovereign - A series of small changes to TPD and Trauma announced over the last couple of months
We will profile in depth each of the changes and provide links to more details over the coming week.
For insurers underwriting is about two trade-offs:
- More underwriting requirements always, to some extent, reduces sales
- More underwriting can improve the risk performance of a book, but adds upfront cost
But what are the trade-offs for the client?
- On the minus side more underwriting takes more time, and is essentially about helping the insurer decide whether to charge you more money, so discovering something the client did not know about has a direct effect on that equation
- Of course, discovering a medical condition may allow for early treatment, management, and a better health outcome. For the healthy client the time and effort is pure waste on an individual basis. But maybe there is a gain as a member of the risk pool - perhaps cheaper premiums, or a gain to sustainability.
I have heard some advisers talk about how the underwriting process has forced doctors to open up to clients more. I have also had some make a case for more underwriting at outset reducing the scope for 'argument' at claim time. But such a case would be predicated on a combination of factors: an outwardly healthy client, with an unnoticed condition, that wouldn't result in the application being declined, that subsequently claims, and the condition has a bearing on the claim. Such a case could not be common.
We are interested in possible customer benefits from underwriting. Do write and let us know if you can suggest any.
On 16 October Jeff Watling from Fidelity Life will be playing 100 holes of golf in a single day to raise money for the LBC as part of a Fidelity Life team.
Every day six children and adults in New Zealand are diagnosed with a blood cancer like leukaemia, lymphoma and myeloma. LBC is the national charity dedicated to supporting patients and their families, this support that can last months or even years. LBC receives no government funding, so the Fidelity Life team has set a goal of trying to raise $5,000 to support this great cause.
If you would like to make a donation to their team then please click here.
Asteron Life has put together a great series of videos highlighting people overcoming difficulty to achieve their goals, as with this promotion.
Here is a grid containing the total deaths by cause for every country in the world.
You can enter 7 countries into it at one time by selecting from the list on the right. The Cause of Death Rankings are in the column to the far left. Follow the instructions to sort the Causes to match the countries you choose. Country Population will appear in red at the top when you enter it into the Grid.
Via Insurance Business Online, apparently some actuaries have been busy contemplating the Rugby, and have come up with odds on an All Black win. Although my heart yearns to agree with them, my heads says that when we get into the late stages of the tournament anything can happen. Link.
This infographic on LifeHealthPRO highlights what millennials see as the biggest challenges and opportunities within the finance and insurance industries.
Asteron Life launched “Lifesnap” a questionnaire designed to help a client think about their financial risk protection priorities before meeting an adviser. It is a really interesting idea reflecting the discovery that online search often precedes offline purchase. Link here.
This is an initiative aimed at clients in support of advisers, as they say on the site:
You are unique. That's why off-the-shelf insurance might not fit you.
Talking to an adviser will help you focus on what's important to you, and it's even more effective with a little preparation. LifeSnap can help you with that.
Tony Vidler shares some good stories about how a strong paper trail wins in the compliance stakes. Link.