With 2008 fast approaching, I thought I would contemplate a New Year’s resolution. Not that I’m one to make a challenging resolution, but a resolution of sorts is always a good way to start the New Year.

So what did I learn this year that could make for a simple, easy-to-keep resolution for 2008? Well to start, I learned from my actuarial friends at Pinnacle Life that no-one’s ever been killed doing the dishes – so perhaps the simple task of doing more dishes this year would help my longevity. And with increased longevity maybe I could argue for a reduction in life insurance premiums? Then again most household accidents occur in the kitchen, so why would I resolve to increase the risk of a serious injury? Perhaps a little more spirituality would help my preparation for the inevitable. But alas, more church in itself won’t make me more religious any more than sitting at my desk makes me a more productive employee.  

Uhmm – Ok, I’ll sponsor a child in Africa – that should make me feel good and it’s not very hard to do. Now there’s the unchallenging and unselfish New Year resolution I’ve been searching for. Happy New Year to all our readers.

Steve

Ok, you won’t like this one… especially over the festive season. It seems if you eat less you’ll live longer.

No… this is not about avoiding obesity. It’s about extending your body’s life at a cellular level! Whilst this has been known by scientists for some time, a recent study has started to shed light on why this is so.  The study suggests the anti-aging mechanism is linked to two enzymes—SIRT3 and SIRT4.  A low calorie intake kicks off a cascade of reactions, raising the levels of these enzymes and ultimately extending the life of cells.

But wait, isn’t this a triple win? You pay less for food, you get to live longer and you get to pay less for you life insurance.

Problem is, this outcome requires you to reduce your calorie intake by 30%~40%.  That’s huge!  Beg’s the question; “how much longer would you live if you did this?”  And what if you lived (say) an extra 5 years – wouldn’t it just seem like 50 years… 50 years of low-calorie hell?

What you say we just wait for those scientists to find another way?    

I’ve had several emails in the past 6 months asking for clarification about ‘underwriting’. So here goes;

Before a life insurance company can offer you a life insurance policy, you usually need to be ‘underwritten’.  Simply put, this means that the insurance company must assess your risk of dying earlier than the average person of your age and gender.

If, in their opinion, you are no more likely to die earlier than average, they’ll offer you a life insurance policy at the standard price. This is usually the price they quote you at the beginning of the process.  If on the other hand there is data suggesting you may die earlier than average, expect to be offered a policy on terms modified to suit your circumstances.  Generally this means an increased price or specific causes of death excluded from your policy.

The job of assessing how likely you are to die earlier than average is carried out by an ‘underwriter’.  The underwriting process involves asking you a series of questions pertaining to your health, lifestyle, occupation and pastimes. These questions are almost always included in the life insurance application form. Obviously if you have a history of a medical condition could potentially shorten your life, then that’s a red flag to an underwriter. Likewise, a lifestyle including excessive drinking or consumption of illegal drugs.

Pastimes are handled a little differently.  If you participate in a dangerous pastime such as hang gliding, you will generally be offered a loaded price to cover your participation, or you’ll be given the choice to exclude the pastime from your policy.

Modern life insurers, such as Pinnacle Life, underwrite their applications directly on-line – through a software-based expert system sometimes called ‘electronic underwriting’ – reducing the time it takes to approve a policy from days, weeks or even months down to minutes. Only in those cases where the software can’t make the underwriting decision will applicants be required to interact with a human underwriter.

Underwriting is not an exact science.  It is usually carried our by people with years of industry experience.  Many underwriters worked initially as nurses or even doctors before becoming underwriters.  Sometimes during the process underwriters need to see the medical records held by your doctor. However, this shouldn’t open the door to an underwriter viewing all your medical files – only the records that pertain to the medical condition relating to your longevity. (See earlier post)

If you have any specific queries on life insurance underwriting, we welcome your contacting us.  

From the authors of The Life Insurance Blog to everyone who is about to really, really, really enjoy the festive season… be happy, have fun and don’t be stupid.

Without wanting to be a party pooper look at what can happen if you’re not careful.

So have a great festive season, be responsible, look after yoursef and your family and above all… live a prosperous, happy, l—o—n—g life.

Finally, as you go on your merry way these holidays, remember this;

If you sleep with your married partner that’s Legal and General

If you sleep with a friend that’s Mutual Trust

If you pay to sleep with someone that’s Commercial Union

If you sleep with several partners at the same time that’s Group Life

If your partner lets you sleep around that’s Liberty Life

If you’re still sleeping with the same partner after 20 years that’s Pinnacle Life!!

Ed and Steve

I’m constantly bemused as new websites keep popping up in NZ offering ‘life insurance online’. There is nothing much wrong with these websites – other than some of the claims they make.

The big claim is that you can buy life insurance online.

True, you can from Pinnacle Life… but not from any of these new websites… well, not yet anyway. For the expectant visitor to one of these sites, sadly, no policy arrives at the end of the online process; only a list of things that will happen next, including being posted the application form for your signature followed by manual processing and envelope-licking… (hey, does anyone still keep stamps and envelopes in their drawer?)

Call me cynical if you like, but I’m not convinced that advertising ‘buy life insurance online’ and then serving up a ’manual process’ involving people, pen, paper and postage is a credibility-winner for our industry.   

Interested in your thoughts…?? 

I read this story in the Herald a few weeks ago which referred to a study suggesting that women, not men, “make almost all consumer purchase decisions and are typically household managers and accountants, yet they are financially clueless when it comes to investments and planning for retirement.”  Whilst I have no comment to make on this, what caught my eye in the story was a financial adviser and author quoted as saying

“…there was more information about financial education and investments available now than ever before. But our financial health is getting worse. We make it harder than it has to be.” 

I agree with this statement, particularly as it relates to life insurance. Today there is more choice.  In NZ there are at least 10 mainstream insurers offering life insurance products and today there is more and more information about these products. Not only is there more choice, but the choices are more complicated with more features and subtle differences. The problem is that whilst the life insurance industry has increased the options and information available to consumers, it has not done anything to educate consumers or help them make a good choice… other than to create an army of ‘advisers’ to help consumers choose.  Consumers are not empowered by what the industry has done.  They are in fact more reliant on advice and less empowered.

This is exactly what Pinnacle Life set out to address in its on-line offering.  Rather than offering a choice of 3 or 4 complicated life insurance products, Pinnacle Life offers a straightforward, no-nonsense product, communicated in plain English.  No insurance-speak, no legal jargon, quick step-by-step buying process and instant cover for people with no indicated health issues. The purpose was to truly empower the consumer and feedback from consumers suggests that has been achieved.  

LOL. A study in Norway suggests adults with a sense of humour outlive those who don’t find life funny.

54,000 Norwegians were asked about their sense of humour and then tracked for 7 years. The quartile with the funniest outlook on life were 35% more likely to survive the study period than those that were, ahem, grumpy. And for those people who had cancer at the beginning of the study, the gain was a massive 70%.

Apparently there are plenty of studies that show laughter reduces stress, lowers blood pressure, relieves pain, oxygenates the blood and strengthens the immune system, all of which add up to increased longevity (LOL makes sense to me). Ten minutes of belly-laughter is believed to give the same benefit as a half-hour on a rowing machine (LOL I know which I’d pick).

Just think of the implications for life insurance.  Imagine this question on a life insurance application form; “Have you ever been diagnosed with a sense of humour?… yes or no”

Come to think of it, life insurance isn’t all serious business you know. You should hear some of the life insurance jokes that go around our industry. It’s true, working in our industry can extend your life!

Here’s one…  “Do you know how much cover you have on your husband’s life insurance policy?” asked the life insurance agent

“What do you mean?” the woman asked

“Well… if you were to lose your husband, do you know what you’d get?” asked the agent

The woman thought a moment, then brightened up and replied, “Probably a poodle.”

Go on. Make us laugh. Send us your best life insurance jokes – we’ll publish them on our blog.  

Love them or hate them… blogging’s all the rage these days.

Anyone with an opinion is writing a blog. Even people with no opinion looking to make people believe they have an opinion are blogging. And then there are those that don’t care if others actually read their opinions, as long as they can read their own opinions they’re happy to blog. So that’s why there’s so much blogging happening… at least that’s my opinion.   So big has blogging become, that people are now blogging blogs about blogging and bloggers!!!

This story appeared on ReZoom about boomers that blog… recommending a list of 40 blogs written by bloggers aged over 40, selected from around the world. Astonishingly ‘The Life Insurance Blog’ is on the list along with others such as David Gilmour (of Pink Floyd fame). That left us boomers (Steve and I) humbled to say the least.

Also see this story in NZ Management Magazine about corporate blogging.  Blog blog bloggedy blog.  Love them or hate them. 

Fletcher Building has joined our Pinnacle Life Corporate Partner Program. This follows several significant companies, including Diners Club Card, joining us in the past few months.

Fletcher Building has an excellent staff discount program. It’s managed by way of a “Fletcher Building Staff Discount Card” – offering staff a wide range of exceptional deals that have been negotiated by the company on their behalf.  With around 9,000 NZ-based staff across 5 operating divisions (including the well known PlaceMakers) and more than 10,000 internationally-based staff, that’s a lot of deals just waiting to be taken advantage of!  We think a lot more companies should be doing this.

We’re proud to announce Pinnacle Life is now a member of the Fletcher Building Discount Card program.

How it works

Fletcher Building staff can now buy a Pinnacle Life insurance policy directly on-line and automatically get 5% off Pinnacle’s normal rates – plus $10,000 free accidental death cover.

That’s up to 20% less than you’d typically pay buying life insurance through a third party – a saving that staff will lock in for the rest of their lives… literally! 

We welcome enquiries from other companies wanting to tie-in with our partner program. Contact us. 

If you’re thinking about life insurance, here are some helpful tips: 

1. Shop around – know your prices  Be aware that life insurance premiums can differ by up to 50% between insurance companies. Some of the Brands that you think should cost less, often cost more.  Pays to check out pricing yourself.  You can get quotes on-line form several on-line brokers.  If you get an online quote from Pinnacle Life, you automatically get 4 comparisons. Remember, life insurance is essentially a simple commodity with little to distinguish between products – you should not have to pay the earth for it.

2. Don’t buy ‘gobbledygook’  The language used in most life insurance contracts is a combination of legal mumbo jumbo and insurance-speak.  If it’s too difficult to understand, don’t buy it.  There are policies you can buy that are written in simple, plain English. That way you know what you are buying. See earlier blog post.

3. If you can’t afford the cover you need, buy the cover you can afford    Most insurance agents will work through a process to calculate how much cover you need.  When they give you the number, it may seem like a lot and you may find it more than you can afford, or simply more than you are willing to pay.  This shouldn’t mean you should avoid buying life insurance. Take charge – decide how much you’re willing to spend, and buy the cover.  Even if it doesn’t completely meet your needs, some cover is better than no cover.  See earlier blog post.

4. Buy when you’re young and healthy – don’t wait till its too late   Healthy people get better rates on life insurance, because you are expected to live longer. So when you are young and healthy, that’s the time to buy.  You’ll enjoy lowest premium rates for life.  If you wait until you have a medical problem you’ll pay more – or be lucky to get cover at all!!  See earlier blog post.

5. Don’t rely completely on ‘group life cover’ offered by some employers    Some employers offer their employees some type of ‘group’ life insurance plan. However, this amount of life insurance coverage is usually not enough to meet all of your life insurance needs. Also, group life insurance policies are often not portable… meaning that if you leave your job, you can’t take your life insurance coverage with you or if you do, it can cost an arm and a leg.

6. Check how much commission is paid  Some insurance companies pay as much as the first 26 months of your premiums to the agent that sold you the policy. Make sure you’re comfortable with that.  Remember, you are paying for that through the premiums. If you are not comfortable, consider buying your policy direct, online.

7. Answer all life insurance application questions truthfully  If you’re thinking about lying on your insurance application, don’t. If your insurance company finds out that you lied about a health-related condition or your lifestyle (e.g., using drugs or smoking), they may be able to cancel your life insurance policy.