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Jphale7
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Thanks for sharing Russell. It really is shocking out there. Having been involved with MH IP claims my whole career at the more extreme end, there's a massive gap between what people expect and what people get with support. It really is a massive black hole and the insurers do draw a line when they determine support from the point of not being able to work. Without insurance the gap is a blue pill from your GP to the mental health crash team and hospitalisation, there's very little in between that's provided publically. Yes there's some counselling, 3-4 sessions, the rest you pay for at $200+ per hour, but that's tokenism in the scheme of things. The one area where we have been very good is addiction services, funded and quite well managed, but tough on the patient. Understanding we are dealing with addiction, so it is tough as the addiction needs addressing before the behaviour support and changes can be effective. I have quite a number of articles talking about the subject on my website, willowgroveinsurance.co.nz. Right now today, the only support to fill the gap is income protection. Which frankly is not enough for New Zealand families and certainly doesn't recognise the non working members of the family and the issues that someone ill represents to the whole household.
Toggle Commented Aug 5, 2017 on Mental Health and Insurance at moneyblog
It is such a sad situation and one I had to deal with as a Business Development Manager many times. Though never once quite as close as this one. This is a primary reason why we advise a 4-week wait on a waiver of premium on all policies that can have it. The missed premium lead up to a disability is a very real issue and one that can often be avoided by having a waiver of premium, even on just a life cover. Given the circumstances, and the short time frame, I hope AMP come to the party. Three unpaid premium is a lapse of cover, though reinstating with catch up premiums in usually still an option until the fourth is due. Which is when the medical disclosures kick in. You could also argue at some point in the preceding 4 months a terminal illness claim would be able to be lodged and this would remove the need for premium the payments. There is a creative way to manage this if AMP is inclined to come to the party. Other insurers in the past haven't flinched at paying in these sorts of situations, they want clients with the confidence that their insurer will pay when they really need it.
Nice analogy, we need to give consumers more credit that they can make a reasonable decision if they are given all the information to make a reasonable decision. Treating them like numpty's that need to be sold to is disrespectful, insulting and drives consumer dissatisfaction and ultimately complaints. Certainly my feeling when being sold to rather than educated and advised through a buying decision.
Toggle Commented Jul 18, 2017 on What's a meaningful difference? at moneyblog
Exactly, the code standard about placing the client first is about balancing these risks in an informed way to ensure the client is able to make the best decision from them. If they understand the risks and non-disclose or cancel existing cover before new cover is completed, you're less likely to face an at fault complaint, the client will probably still complain. Replace benefits and not do it in an informed way, expect complaints, it's really quite simple.
Thanks for the research and clarification, AIA's stance would seem potentially restrictive. Also Sovereign's not mentioned their old MajorCare policy, delivery of treatment and application of claim management may or may not have a shortfall if the cost is above $150,000...
Thanks Russell, pertinent discussion point and one for the consumer, looks better to have it all bundled. The reality is yes movement rates probably increased with the introduction of insurance into super, also too the perceived security of having both super savings and insurance covered. (Lived in Aussie for a while and did their quals too) We've seen it here and I hope we don't ever repeat it. The bundling ignores a couple of fundamentals, super contributions are largely static and insurance premiums increase with age, leaving the punter up the creek when it comes retirement, because the insurance premiums ate it. The only people winning are the insurers, fund manager and advisers... Yes there are ways to mitigate the problem, level premium products. That creates another issue in that the client is contributing more to insurance early on than they would have and this suppresses the long term investment value, which is also quite considerable at the end when you really need it. IMHO bundling of increasing cost products with long term savings on a 'fixed' contribution rate is fraught. Advising to do this is financial malpractice. Keeping them separate maintains transparency and also give the client the flexibility to move when required. A different fund manager but they have conditions that require the retention of the insurance, or the opposite, they have better product or terms with another insurance carrier and they like where their investment is. Bundling takes away choice, this creates issues that directly impact on the perception of advisers and our industry. Give clients choice and control over their outcomes and we will see the attitude to our industry improve considerably. Continue to 'protect' in the way we do by restricting product and provider options and bundling products that are detrimental to the customer, then don't be surprised that the current attitude to advisers continues.
Excellent points, though certainly not just older folk and language challenges. A now client I was reviewing a couple of years ago was going through a whole lot of challenge, ex-wife and kids issues, new relationship, buying a house, moving two families together and changing kids schools, and we were discussing their insurance cover. Given there was existing cover, that could do with some tweaking, sufficient for the immediate need, I backed off as they didn't have capacity to make the right decisions for them. This was later proven when their F&G broker who had been doing the life cover too called them in to review their house cover, for obvious reasons. In that meeting not only was the house cover done but their life insurance was moved. When I caught up with them once the dust has settled it was too late and the cover had been long moved. The issue is the client had pre-existing conditions which precluded moving the IP, degenerative conditions that more than likely would be the cause of a claim. The new IP cover excluded these conditions, thus effectively rendering the new contract useless for expected and anticipated claims. With the discussion with the client they thought they were insured still with the original company, they didn't recall completing a new application, not signing off terms and they didn't have copies of anything in their own files other than a policy doc still in the sealed envelope. This is a real concern and bore out my original feeling on the situation. I'm disappointed that the other broker was only looking for the sale. Is this a complaint in waiting, probably. Is it one now probably not, the harm needs to be realised first, the degenerative conditions need to cause a disability to proceed further. I've got file notes and discussion around the situation, so forearmed if it does turn to custard. But that's cold comfort to a client who is concerned about having the right cover in place. I'm sure this happens everyday, and as advisers sometimes we need to back up, take some time and work it through. We know it and understand it, it's easy, for clients not so much. Certainly with my clients buying first homes it's a real struggle for them to get everything in order and straight while going through a stressful time of their life, where everything is new. Sometimes backing off for just a few weeks gives enough space to get it right, interestingly the fear that they'll go elsewhere isn't the case, they know it's in progress, underway and will get sorted and does.
Thanks Russell! This must be the clearest document on the subject of tax and income protection from the IRD in some time. Clearly the intent by IRD is where the insurance payment is directly calculated from the lost income it's taxable, if it's not then it's not. Making the intent from IRD for Agreed Value policies not to be tax assessable. (It's still a rough document to follow and needs more analysis and commentary!)
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Nov 15, 2015