Insurer Product, Underwriting Responses to Coronavirus Crisis

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RiskinfoNZ has canvassed the country’s leading retail insurers around two key underwriting and product issues associated with the impact of the Coronavirus crisis on both new and existing policyholders:

Q1: How are you taking the coronavirus pandemic into account in the challenge of underwriting new life insurance policy applications?

Cigna
We’re continuing to review all new applications individually, as there may be heightened risk for certain occupations and employment status, product types, and for new applicants who have certain underlying medical conditions.

As a result, we may need to impose restrictions or special conditions on new applications as part of the underwriting process. These restrictions or special conditions are intended to be temporary and will be reviewed once the COVID-19 pandemic is under control.

AMP Life
As always, new applications are underwritten according to AMP Life’s underwriting philosophy and guideline standards. Medical and financial requirements depend on the customer’s individual circumstances, such as age, the sum insured applied for, and overall disclosures.

Partners Life
Both the current COVID-19 Pandemic, and the surrounding government imposed restrictions present risks which are very difficult to quantify at this stage.

Partners Life has a number of temporary underwriting restrictions applying to any newly-underwritten policies and benefits, including limiting new Business Protection Plan benefit availability, availability of Agreed Value disability benefits, a stand down on eligibility for Premium Holiday and Policy Suspension claims and a blanket mental health exclusion on new disability benefits.

We have committed to our advisers that as soon as we are able to ease restrictions for new business, we will also review and remove these restrictions on business written during this interim period. It is conceivable these restrictions could evolve or change to reflect this new understanding.

Fidelity Life
To date we haven’t put any broad, mandatory policy exclusions in place. We’ll assess each case individually and, where customers are deemed to have an increased personal risk relating to Covid-19 (due to their age, or pre-existing medical conditions), we may look to mitigate that risk on a case-by-case basis.

We’re monitoring the situation closely in partnership with our reinsurers.

Asteron Life
Following the New Zealand Government’s ‘do not travel’ alert in March, we are screening new applicants who have completed any recent international travel.

If an applicant answers yes to our COVID-19 screening questions, their application is referred to underwriters. Our underwriters then contact them to understand more about their travel history and potential exposure to COVID-19.

Cover will only be considered if a 14-day period has passed since any potential exposure, with the applicant showing no signs of infection from the virus.

AIA/Sovereign
AIA referred RiskInfoNZ to a statement on its website. Our insurance products do not contain exclusions for pandemics. If you need to make a claim related to COVID-19, as with any other claim, you will simply need to meet the eligibility requirements for your type of cover.


Q2: What measures have you implemented, or are considering implementing, in terms of instituting life insurance premium waivers for policyholders financially impacted by the Coronavirus crisis?

Cigna
Customers that hold an Assurance Extra, Business Assurance, Agribusiness Extra or Business Extra policy, that contains Life Cover, Trauma Cover, Total Permanent Disability, Complete Disability Cover (CDC) and/or Sum Assured 1-12 Months may be eligible to take a premium holiday period of one month.
Customers will continue to be covered for the duration of the premium holiday.
The premium holiday is available on all policies regardless of sum assured, however the following limits will apply for any claimable event which happens during the premium holiday period:
• The maximum Life Cover sum insured payable will be limited up to $500,000 per life assured.
• The maximum Trauma Cover, TPD and CDC sum insured payable will be limited up to $350,000 per life assured.
After completing the one-month premium holiday period, eligible customers can then suspend their premiums and cover for up to three months. Full details here.

AMP Life
If customers are experiencing financial difficulty, we’ll look at their circumstances and work out how best we can help.

Partners Life
We’ve introduced the COVID-19 Premium Holiday. This can be accessed if a policyholder’s net income drops by 20% or more as a result of the COVID-19 outbreak or government restrictions imposed due to the outbreak (after taking any government subsidies or benefits into account).

This works the same as the normal Partners Life Premium Holiday with up to 6 months of full coverage provided with waived premiums, but is available to clients as an additional feature on top of our standard Premium Holiday and Policy Suspension options, which are also still available.

Fidelity Life

We’re working on a lockdown relief package to practically meet the needs of customers facing financial hardship as a result of the lockdown. Some of the options we’re looking at such as temporary hold are taking longer than usual to finalise due to these unprecedented circumstances. We continue to work on the package as a priority and hope to have more to share soon.

In the meantime, we’ve just announced a premium relief option, a simple, accessible solution to help customers facing financial hardship keep their policies in place while they get back on their feet.

  • 90 days’ premium relief
  • No premiums paid during this time
  • Cover remains in place during this time
  • Prior to the end of the premium relief period we’ll contact the customer to discuss next steps based on their individual circumstances. These include paying off the premiums from the 90 day relief period in full or over 12 months (in addition to the regular premium), or other options such as temporary hold

Asteron Life
Financial support options available to Asteron Life customers with Lump Sum Covers include:

  • Premium Holiday – allows customers to stop paying premiums for up to six months if they’re unemployed or experiencing financial hardship
  • Premium Freeze – allows customers to freeze their stepped premium on lump sum covers for 12 months. This option reduces the lump sum benefit and applies from the policy anniversary
  • A mixture of stepped and level premiums
  • Restructuring Trauma cover – an option to decrease premiums while still providing cover

AIA/Soverign
If you wish to retain your cover but are unable to afford your insurance premiums, you can miss up to two months on AIA Real and older AIA products and up to three months on AIA Living, Sovereign and ASB products without your policy lapsing.

We we have put together the following premium relief options.