The first ever cancer-only insurance policy in NZ is now available from online provider Pinnacle Life.

What is Cancer Cover?

Cancer Cover is a form of stripped-down trauma insurance.

Whereas trauma insurance typically covers as many as 30 different ailments and is expensive, Cancer Cover focuses on the most significant of these risks, being Cancer. To put this in perspective, over 85% of trauma claims paid out by insurers relate to just three conditions – cancer, heart attack and stroke – and if you break this down further, 80% of these claims relate to cancer.

Cancer Cover is part of Pinnacle Life’s bid to win younger, price-conscious policyholders from the big insurers who dominate in trauma insurance.

Why does Cancer Cover appeal to younger consumers?

Many of the conditions covered and paid for under trauma insurance are related to ageing… such as heart attacks, heart bypass surgery, stroke, arthritis, Alzheimer’s and chronic lung disease. Whilst there is obviously some risk associated with these diseases for any consumer, more and more people in their 20’s and 30’s just don’t see the value in paying to cover these conditions. They see them as extremely low risk.

Any stats to support this?

• Cancer is the leading cause of death in NZ, accounting for 30% of all deaths.
• 1 in 6 people will be diagnosed with cancer between the age of 30 and 64.
• For females the biggest cancer killer is breast cancer. All women have a chance of developing breast cancer at some point in their lives.
• Breast cancer accounts for 17% of all female cancer deaths and around 1 in 9 women in NZ will be diagnosed with breast cancer at some stage in their lives.
• For males, lung cancer is the highest killer – accounting for 21% of male cancer deaths. However, prostate cancer represents the highest incidence of male cancer – 25% of all male cancer cases.
• In 2005 (latest NZ stats that I can find online) there were 18,610 new registrations of cancer in NZ and 7,971 deaths. This means there were almost 11,000 more people living with cancer than the previous year.

Why is cancer different to other ailments such as heart disease?

Cancer doesn’t correlate with age to the same extent that many other ailments do… even the young and the fit are susceptible. Like super-cyclist Lance Armstrong (testicular cancer in his 20’s), Wallaby rugby player Julian Huxley (brain tumour), cancer doesn’t respect how young or healthy you are.  It just happens.

And if you’re unlucky enough to be diagnosed with cancer, the financial consequences can be severe. You may need to take time off work. Or you may need to remodel your lifestyle, or you may need to find cash for to fund cancer treatment or medication.

That’s where Cancer Cover comes in… affordable cover that pays a lump sum if you’re diagnosed with Cancer.

Is Cancer Cover more affordable for younger people?

Pinnacle’s cancer policy pays up to $250,000 if you’re diagnosed with cancer. The specialised scope of the cover can save a bundle in premiums. A 40-year-old non-smoker in good shape with limited history of cancer in the family buying the cancer cover would pay only $19 a month for $100,000 of cover… compared with $37.55 that you’d typically pay for trauma cover in NZ.

You can get cancer Cover online in less than 10 minutes… and if you click here to buy, some extra cover will be thrown in free…

PINNACLE LIFE today claimed another first in NZ… Cancer Cover… now available as a fully underwritten product instantly online.

Cancer Cover, as explained in this Stuff article, is a straightforward insurance policy that pays a cash lump sum if the insured person is diagnosed with cancer… simple as that!

With the purchase of a Cancer Cover policy, Pinnacle Life will donate the first three monthly payments to either the NZ Breast Cancer Foundation or the Prostate Cancer Foundation of NZ (depending on the gender of the person covered by the policy).

Cover up to $250,000 can be purchased immediately online, without a medical.

The policy is applied for and issued online in the same way that existing Life, Mortgage and Funeral products are offered on the PINNACLE LIFE website. The buying process from application to policy issue is fully automated using advanced electronic underwriting software developed by Intelligent Life Limited.  The on-line underwriting is supported by reinsurance giant Hannover Life Re of Australasia.

The entire application process takes less than 10 minutes after which applicants can see a draft version of their personalised policy document before committing themselves.  On payment, consumers are emailed their policy document instantly.

Whilst Cancer Cover is designed essentially for the under-45 consumer, it is available online to anyone aged 20 to 59.

Buying Cancer Cover is now as straightforward as buying an airline ticket… maybe even easier!

Today’s ‘instant serious illness cover’ follows the launch of instant Life Cover, instant Mortgage Cover and instant Funeral Cover by PINNACLE LIFE over the past 18 months.

See also Stuff article here.

We copped some flack this week for standing up for policyholders whose premiums are about to be increased by some life insurance companies. The flack from some professionals in the industry was a little unfair, we thought, with some comments bordering on what we would regard as ‘myths’. I’d like to bust a few of them…

Myth 1

Pinnacle Life sources it’s new business by somehow ‘piggy-backing’ off the hard work of other insurers…

Busted! Pinnacle Life spends significantly on radio/TV advertising and employs its own underwriters and administration staff… fair to say that Pinnacle Life pays its own way for its new business.

Myth 2

Consumers that buy insurance from Pinnacle Life don’t understand what they’re buying…

Busted! It’s patronising to suggest consumers are illiterate and can’t understand a straightforward policy document, particularly when Pinnacle Life won the NZ WriteMark plain English Award in 2009 for its clear and understandable policy wording. We think consumers are smarter than that.

Myth 3

An adviser that switches a policy to Pinnacle Life to achieve a 20% saving for a client, while earning a 75% commission is “shameless”…

Busted!  If that adviser is shameless, what do you call an adviser that switches a policy to achieve a 5% saving for a client and then pockets a 220% commission?

Myth 4

Pinnacle Life’s only point of difference is price…

Busted! Besides offering the most competitive prices in NZ, life insurance policies from Pinnacle Life are jargon-free, straightforward and relevant… and can be purchased online in less than 10 minutes…

Ok, we admit we’ve been rather quiet on this Blog lately.

There’s a lot to catch up on, starting with the fact that Pinnacle Life is now advertising on TV.

If you’re a regular TV watcher, you’ll see the PINNACLE LIFE ads on TV3, Prime and some of the SKY channels.

Here’s the first of three ads, right off YouTube… click here to view

Feel free to let us know what you think…?

We heard this morning that the internet domain name www.insure.com traded hands for a cool NZ$21million, and this is regarded as the highest amount ever paid for a domain name, bettering www.sex.com by $5.3million. I needed to check the facts and found this reference…  and another one here…so we presume it’s entirely true.

Surprised?

We’re not.

Especially since the word ‘insurance’ is reputably the most expensive adword (paid search term) on Google.

But what does this all mean. Does it mean people are more interested in insurance than sex?  Yeah… right!

Clearly there is an assumption by businesses around the world that insurance lends itself to the internet and that there is money to be made in this way. It certainly puts paid to the theory (repeatedly trotted out by those regular, old fashioned, overpriced life insurance companies) that life insurance must be sold… and that people don’t buy life insurance.

I mean, come on… you think someone’s going to buy the domain name www.insure.com for $21mil if no-one buys life insurance online?

We’ve been saying for some time that life insurance is the next big thing on the internet.

Looks like someone’s paid $21mil to prove it.

 Question from Grant

We have a broker who argues the value he offers is when a claim is made. Thankfully we have yet to test this, but I can well imagine that neither my wife nor I would be in the best headspace to submit or let alone argue a claim with an insurance company. How does Pinnacle counter this point?  

Answer

There may be a lot of variability when you submit an accident claim for your car, or a health insurance claim. So maybe if an insurance broker goes in to bat for you it could be helpful in some circumstances.

But for a life insurance claim, it’s relatively straight forward… your are either dead or you are not dead. And ‘dead’ is usually quite easy to prove. All you need is a death certificate and Bob’s your late uncle.   

Given that Pinnacle Life is in the business of life insurance (not car insurance or health insurance) , Pinnacle Life typically doesn’t spend a lot of time haggling over claims.

So, would you better off if you used a broker to submit your claim? Personally I don’t see the point.

We’d like to comment on a story on Good returns in which Asteron’s Sean Carroll reportedly had this to say;

“The commission war over the past few months had done nothing for the industry, and as an actuary, he said he knew “exactly” how it is costing his competitors. Change needs to be customer-driven, and Carroll said he does not think the commission rates being offered are sustainable.”

We entirely agree with this comment, particularly about change needing to be customer driven.

Our view is this…

Selling more life insurance is not about hiking up commissions to levels well over 200% to incentivise brokers to sell more and more of your products. In fact, it’s not about ‘sales-push’ at all.

Selling more life insurance is about making products more relevant, more accessible (read internet) and more affordable.  

It’s about designing policies that people want to buy, not incentivising sales people to do the hard sell.

Following up on Steve’s post a few days ago regarding high commissions, thought a quick comparison of life insurance premiums across the NZ market would indicate just how much more efficient it is to buy your life insurance online.

Take a look at this simple comparison table for two 40-year-olds buying $300,000 life insurance cover… 

 (All prices have been sourced from quotes on NZ website available to the public)

On average you can save over 20% if you buy on-line… go figure J

In June last year insurance commissions were in the news and we wrote this story on our blog. This month, commissions are in the news again. See this article posted yesterday on Good Returns.

We don’t really want to get into the debate all over again (yes, really…) but we think it is important for NZ consumers to be aware of what is going on in their life insurance industry.

In the story we are referring to, insurance companies are now paying commissions of 230% to get brokers to sell their products. Of course, these brokers are absolutely independent and are entitled to sell any insurance products they wish.

Now if you were a broker I’m sure you’d be happy to offer the product for which you’re paid say 150% commission rather than the product paying 230%. You’d always choose the product that’s best for the consumer. It makes perfect sense… wink, wink.

Anyway, as long as NZ consumers realise that buying through a broker chews up the equivalent of the first 2 years and 3 months of your premiums, plus a little more each year thereafter for the life of your policy, then that’s ok.

But it’s also worth knowing that this is one of the key reasons it’s around 20% cheaper to buy life insurance online.  

So, if you know how much life insurance you want, why not go online and save yourself a bundle?    

In July 2008 Pinnacle Life launched a policy called ‘Funeral Cover’.

Whilst the product is designed essentially for people over 50 (and many insurers call it ’50 Plus Insurance’) it’s available online to anyone aged 30 to 69.

What surprised us is the proportion of people in their 30’s and 40’s that have purchased Funeral Cover - clearly the product’s hitting the mark with Generation C… so to speak!

How does it work?

The entire application process takes around 5 minutes… after which you’ll have a policy covering your funeral for $5k, $10k, $15k or $20k. And the premiums offered for these cover amounts and for this type of product are the lowest in NZ. 

Best of all, being a ‘guaranteed issue’ product, Funeral Cover is offered with no health questions asked, and the policy is emailed to you immediately online.

And not only do the premiums stay the same every year, but once you turn 85, you totally stop paying – and your cover continues free of charge until you, ahem, expire.

And the extra bonus?

Your family will say great things about you at your funeral. See these ads from YouTube…

http://www.youtube.com/watch?v=V4FHeVWjGrc

http://www.youtube.com/watch?v=Nw0s4C0g5SM

 (It’s ironic that this latter video was the last advertisement directed by a popular Malaysian movie director, Yasmin Ahmad, who died soon afterwards of a stroke aged just 51…)