Amid calls from financial advisers and clients asking what Partners Life is offering to soften the blow of the current alert levels, the firm’s Managing Director Naomi Ballantyne says it is analysing economic data – having been taken advantage of last time around.
In a company video (below) Ballantyne says the current Government lockdown is different to previous ones.
“The New Zealand economy was going gangbusters before the current lockdown, many business had not only recovered the ground they lost from the last lockdown, but are doing better than they ever had – including our industry,” she says.
“So we now know that post-lockdown bounce-backs can be expected to happen and the financial impact on businesses can be temporary.
“For those wondering what we will do, we are monitoring every aspect of our business, we are staying abreast of Government announcements, and we are analysing emerging economic data.”
…some people took advantage to obtain a benefit they didn’t need.
While the firm ended its Covid-19 specific premium holiday offering after the first lockdown, it has enhanced its contractual premium holiday and policy suspension benefits.
“This enhanced criteria continues to be available,” she says. “We have included spouses and partners in the eligibility criteria for redundancy and bankruptcy – even if they weren’t a life-assured under the policy.”
Ballantyne says clients who didn’t need to apply for premium holidays during the first alert level 4 lockdown in 2020 did so anyway, many with the encouragement of their financial adviser “… some people took advantage to obtain a benefit they didn’t need”.
“That free cover was never free to us,” she says. “Not only did we continue to pay claims on policies…We also continued to pay renewal commissions to advisers while those premiums were on a holiday.
“To the honest hardworking and ethical advisers, I apologise to you for the few opportunistic ones who encouraged customers to take advantage of our kindness for their own gain. They have made us a little more gun-shy and have exposed every other customer to the financial consequences of their behaviour.”
Ballantyne says the lapse rate of policies placed on a premium holiday was 20% higher than policies that were never given a holiday by the firm. Meaning clients took the premium holiday and then moved their business to another insurer.
Ballantyne says advisers have a significant role to play in helping clients understand that their life and health insurance is not a discretionary spend. That clients’ financial survival is dependent on their ability to work “…which can be taken away in a heartbeat – and they may not be able to last very long without an income”.