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Forward Thinking Magazine : August 2010
4 Macquarie Adviser Services The approach new products such as Macquarie Life Active take mean consumers will develop a better understanding of how life insurance works. They will also have more confidence that they will receive a payout following an insurable event. This will give policyholders more trust in insurers and insurance products, which will help ensure consumers have the right insurance cover for their needs. It means that should the worst happen, an increasing number of people will be able to survive financially during and following periods of ill health. “The industry is evolving to make insurance more attractive for consumers,” says Dr Sally Phillips, Macquarie Life’s Head of Underwriting and Claims. “New ways of providing insurance mean consumers are starting to understand how insurance works and have more confidence claims will be paid, especially for total and permanent disability (TPD) claims,” she says. Building blocks of change Although change is happening, a large proportion of the population still have serious misperceptions about how insurance works. Macquarie Life recently conducted a series of “vox pop” interviews with people in Martin Place in Sydney, asking them what they understood about life, trauma and TPD insurance. Many of the comments demonstrated the lack of understanding the general population has about insurance. In relation to life insurance, one interviewee said “I think it’s part of my mortgage... I could be really wrong here.” Asked what she understood about trauma insurance, one said it applies if “I’m in some sort of trauma situation, ifIgetheldupatworkandIcan’tgotowork because of trauma.” Commenting on insurance generally, one said “I assume because I’m young I don’t need it.” As these quotes show, a fresh approach is needed to make sure consumers have the right cover for their needs and to help them understand how insurance works. “At Macquarie, we’re turning insurance on its head,” says Dr Phillips. “ We have new consumer-focused products that explain how insurance works in plain English. We’re also taking the subjectivity out of insurance claims to give consumers greater confidence in the claims process.” In the past, life insurance products operated in separate boxes. There were four main types of cover and advisers had to sell each benefit separately to clients. Consumers could take out disability cover, which provided monthly financial support for ongoing monthly expenses in the event that an accident or illness prevented the policyholder from working. Total and permanent disability cover was the next stage, which provided lumpsum financial support in the event that an accident or illness prevented the policyholder from working permanently. Trauma insurance covered people for their salary in the event that they had to take time off work as a result of illness or injury. The final cover was death cover. Historically, although a range of insurances were available, some parts of the body were not covered by any of these policies. Dr Phillips says, “In the old scenario there were whole areas of the body that were not covered. For example, cancer and heart attacks are covered. But under old policy types, many areas of the gut are not covered, nor are you covered if you have a section of your lung removed.”