Daffodil Day is about raising the public’s awareness of Cancer and donating to the Cancer Society.

For us life insurance guys, cancer is always top of mind, because cancer is such a significant disease and one that many people insure for.

Insurance won’t stop you getting cancer, unfortunately. But it can help to make your life easier or the lives of your family and dependants. People take out life insurance so that if they die from cancer, their family can survive financially. Some people also take out Serious Illness (or Critical Illness) cover which pays them a cash lump sum, tax free, in the event that they contract and survive cancer. The money can be extremely helpful in allowing sufferers to restructure their lives, pay medical bills, pay off the mortgage or help make up lost income.  

See Serious Illness Cover online.

Cancer stats are pretty scary

·          1 in 6 people will be diagnosed with cancer between the ages of 30 and 64.

·         Cancer is the leading cause of death in New Zealand, accounting for almost 30 percent of deaths, slightly more than non-congenital heart diseases.

·         For females, the biggest cancer killer is breast cancer (17% of all female cancer deaths)

·         For males, the biggest cancer killer is lung cancer (21% of male cancer deaths) however the highest ‘incidence’ of cancer is prostate cancer (25% of cancer cases diagnosed).

Click here to go to the Cancer Society website or click here to see our last year’s blog on Daffodil Day.

Last week Pinnacle Life was selected as a finalist in the 2009 New Zealand Internet Industry Awards.

These awards are run out of Wellington by the Liz Dengate Thrush Foundation acknowledging and rewarding websites in four categories:  Best Business Application on the Internet, Social Benefits, Educational Programs and Internet Entrepreneurship. 

Whilst Pinnacle Life didn’t win, we’re immensely proud to have been recognised as one of the four finalists in the Best Business Application Category for 2009… and the only non-Wellington-based organisation to reach the final round! 

That’s not my opinion, mind you. I’m just telling you what the New Zealand statistics for life insurance tell us.

I’m not referring to the fact that women live longer. And I’m not getting into the debate about whether women on average earn less. I’m busy looking at statistics that say for every three NZ men that buy life insurance, only two women buy life insurance. That’s a simple fact. To back this up, a survey released by AMP in 2006 found that “one member of the household tended to be the most underinsured – the mother”, and concluded that 70% of mothers either don’t have life insurance or have inadequate cover.

Of course, this could be a statistic exclusive to New Zealand so I thought I’d check with our Reinsurer’s Hannover Life Re. And guess what… the proportion is similar in Australia – out of every 100 people buying life insurance, around 60 are men.  

Why is this so?

Do women genuinely have a lower need for life insurance? Or are there other factors?  Maybe people who buy life insurance are typically family breadwinners and maybe this statistic is skewed towards men?  Maybe it’s a spill-over from our traditional male-dominated family model, where men worked and women raised kids? Or maybe it’s because insurance brokers are more typically older males and maybe they don’t tend to target women as much? Before I get carried away speculating why women are underinsured, I’ll let you into another statistic…

In the 2006 AMP survey, only 55% of New Zealand families (hey that’s men and women) were found to have life insurance. They also found that 67% of families in New Zealand are either underinsured, or are not insured at all. So whilst women are obviously the underinsurance culprits here, men aren’t off the hook either!

Back to the statistics… this one intrigued me most of all…

Over 90% of insured people believe they have enough cover, yet only 31% have enough life insurance to support their families for five or more years. Go figure.

Before I sign off, I’ve got one more really interesting statistic to share with you. Of those who purchased an ‘online’  life insurance policy from Pinnacle Life this past year in the 20 to 29 year-old age bracket, 60% were female. Hmm, it seems times they are a-changing…    

Last week the NZ Herald ran an article entitled “Why women pay double for income protection insurance” then followed up with “Women ‘have grounds’ to fight high premiums”.  Git outa here! What nonsense is this?

Let’s start with… what is Income Protection Insurance?

Income Protection insurance pays out when the policyholder is unable to work, either through illness, injury or redundancy, depending on the terms of the policy. It’s typically a very complex product with a ton of small print around the conditions under which your claim will be paid; such as how long you must wait before you’re paid, calculating the amount you’ll be paid and for how long you’ll continue being paid… if indeed you’re lucky enough to be paid at all. (And for the record, this is why we at Pinnacle Life don’t offer this type of product – we prefer to keep things simple.) 

So what’s the fuss about?

The fuss is about the fact that female premiums are significantly higher for this product than male premiums, and that this constitutes some kind of unfair practice. Also, because premiums for women are so high, many women can’t afford the product.   

Is this fair?

Totally. It has absolutely nothing to do with gender discrimination. The reality is this; claims by women on this product exceed claims by men by some large margin. And so insurance companies are obliged to charge women more. It’s simple math.

Is there something we can do about this?

Of course… we could have a different approach. We could combine all the claims by men and women and work out an average and charge men and women the same for Income Protection.

But… then we’d need to look at many other insurance products and do the same thing. For instance, men pay more than women for life insurance.  So let’s work out an average so we all pay the same. Wait a minute… men pay more for their accident insurance and funeral insurance. Why not make the premiums for these products the same too? And hey… what about smokers and non-smokers paying the same premiums for health insurance… it’s brilliant!   

On the other hand, maybe we can just get real and accept the fact that people are all, well… different.

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…)

If you indicate on your life insurance application that you have a particular medical condition (such as asthma), does the life insurance company have any right to request your ‘full’ medical history from your doctor?

This is roughly the question that has been tested with the Privacy Commissioner by the New Zealand Medical Association recently.  You can read the report here in the NZ herald.

The short answer according to the commissioner, Marie Shroff, is “no”.

(This was also the conclusion we reached in our blog post almost two years ago… which you can read here.)

So what does this all mean?

If you disclose a medical condition such as asthma, your medical practitioner is not compelled to provide any of your medical history, other than your medical history specifically relating to asthma.

A good thing, no?

Well, yes and no.

On the one hand, there may be circumstances that people may feel are private, and unrelated to any condition that should affect their insurance application. So from this perspective, it is a good thing that these records can be kept private from the insurer, or from anyone else for that matter.

On the other hand, however, in some respects it may cause an insurer to miss something of importance that they in fact should know about. What about the asthma sufferer that also had an undisclosed gastro condition? This ruling prevents the opportunity for the insurer to discover this, and price the policy accordingly.

Unfortunately these things are never straightforward but hey, the commissioner’s ruling rules…