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Zurich

How to solve a problem like TPD?

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Zurich introduces new assessment criteria as part of an innovative rethink of misunderstood cover.

An insurance purchase generally entails an expectation that when the ‘wheels fall off,’ financial loss is compensated by an equivalent claim payment.

Historically some total and permanent disability (TPD) contracts, have fallen short of this expectation as claimants are required to be injured to the extent they’re deemed unlikely to ever work again. This severity benchmark and occupational claim hurdle have contributed to recent media coverage around TPD claim denial rates and the frequently held misconception that you virtually have to be permanently hospitalised to claim against TPD. with such disconnect between financial loss and claim outcome, it is easy to see why some observers have questioned the value of TPD.

Contrary to the idea TPD claims are ‘pigs might fly’ type events, or life insurers might force a librarian to work as a truck driver, Australian life insurers pay hundreds of millions of dollars in TPD claims each year. In reality, we know TPD can be a vitally important part of the protection strategy and the financial assistance it provides changes lives, but with that said, it’s important to acknowledge that not all TPD contracts are created equal.

As part of its recent risk product overhaul, Zurich has re-engineered its TPD offering by adding a number of additional – non-occupation based  – assessment criteria to flagship Wealth Protection product.

Zurich’s medically based claims alternative that alleviates reliance on a client’s future ability to work is known as extended activities of daily living (Extended ADLs). To further improve the confidence around the TPD conversation and better align claim outcomes with client expectations, a partial and progressive payment system is also available through Zurich’s platinum TPD feature.

Extended ADLs – moving beyond the self-care definition

It’s critical to acknowledge that whilst most traditional TPD products include a form of ADL cover, Zurich’s approach is distinctly different.

The extended ADL framework captures a much broader range of assessment criteria’s and qualifying benchmark at claim time are considerably more lenient. For example, whilst traditionally ADLs centre around the claimant’s ability to self-care, Zurich’s approach expands the qualifying criteria to include an individual’s functional status across the following six categories:

  1. Self-care
  2. Communication
  3. Physical activity
  4. Sensory function
  5. Hand functions
  6. Advance functions.

So let’s look at the practical application and the benefits the extended ADL framework con deliver clients.

 

[via FINANCIAL STANDARD]

AMP modifies insurance offering

AMP modifies insurance offering

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Newly-launched improvements to AMP’s life insurance offering are aiming to give advisers and customers greater flexibility and choice.
To ensure customers’ cover stays contemporary, AMP director of insurance proposition Greg Johnson said options can be added to existing AMP Elevate insurance plans, giving advisers the ability to alter a cover without the need to take out a new plan.
One of the new features includes linking members’ standard income protection plans in super to plans held outside superannuation.
This enables having an agreed value income insurance while most of the premium can be paid from the member’s super account.
In another improvement a new inbuilt ‘buy back’ feature allows customers to reinstate linked life insurance cover 12 Months a total permanent disability and death (TPD) claim without providing additional medical information.
Customers can also apply for TPD sum insured higher than their life insurance sum insured through their super.
This is especially important for people without dependents who may value higher TPD coverage over the need to leave a legacy behind, Johnson added.

[via FINANCIAL STANDARD]

Sunsuper

Sunsuper overhauls TPD cover

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Sunsuper has overhauled it’s total and permanent disability (TPD) insurance cover in a move that will see an average premium reduction of 15% for more than 90% of its one million members.

The new product, TPD Assist, will remove waiting periods for a majority of claims as well as a replace lump sum payments with annual support payments. It is part of a wider initiative to encourage members to return to work where possible.

A study of Sunsuper members who had previously been paid a TPD claim found that 36% had returned to work or were actively seeking employment. It highlights that ‘permanent’ is not necessarily forever and many members want to return to work, Sunsuper said.

Sunsuper’s head of product Wanda Britton said TPD Assist focuses on being there for members when they need it most, both financially and emotionally.

Britton added the new tailored product “means that most of our members will see an average reduction of 15% in their combined annual death and TPD Assist premiums.”

This will work by reducing current TPD rates by about 30% and partially offset by an approximate 15% increase in death rates. The increase death rates are from a spike in death claims at the fund and across the entire industry during 2015. If Sunsuper didn’t introduce TPD Assist, combined premiums were likely to increase.

Britton said, as an example, for a member who suffers a back injury, they or their employer can contact Sunsuper on diagnosis to immediately begin the claim process. the member is then referred to a Vocational Rehabilitation Specialist who will work with them, their employer and their treating doctor to support them with a tailored program.

“Once the member is assessed as meeting the definition of being totally and permanently disabled, they will receive their cover in six equal annual support payments over five years – unless they’re able to return to work earlier at which time the payments would have stopped,” Britton  Said.

The new product will launch on the 1st of July, 2016, and was developed based on 18 months of research in consultation with more than 1000 Sunsuper members.

[via FINANCIAL STANDARD]