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Forward Thinking Magazine : August 2010
8 Macquarie Adviser Services The new approach takes a whole-of-body perspective of life insurance and ensures the policyholder is covered for any body condition based on outcome rather than diagnosis. Macquarie Life Active combines TPD, trauma, death and disability insurance in a single package, giving policyholders and their families peace of mind that they are covered should they suffer any sort of difficult illness or injury. “Rolling different policy types into a single policy makes it much easier for consumers to understand,” says independent physician Dr John Cummins, who is Practice Principle of Executive Medicine in Sydney and also Chief Medical Officer with reinsurance firm Gen Re. “Having a single policy is great because in the past it has been difficult for consumers with more than one policy to understand which one to claim on. It also avoids having to pay twice for very similar policy benefits, when you can’t always claim under both policies. Having one policy should also make life insurance more affordable, because policyholders will only pay one premium, not multiple premiums for each element of insurance cover,” says Blight-Johnston. The new way of providing insurance also de-links occupational factors from claims payouts. So payout is no longer dependent on the impact an illness or injury will have on the policyholder’s ability to work. Instead, medical factors determine the payout. This removes the need for doctors to make a subjective assessment of the policyholder’s ability to return to work. Macquarie’s policy also focuses on the outcome of the illness, rather than the illness itself. “If someone is diagnosed with multiple sclerosis, when the person makes a claim, an assessment will be made about how it affects the body on an ongoing basis,” Dr Phillips says. Importantly, claims and payouts are assessed on a stage-by-stage basis. If, for example, a policyholder is diagnosed with breast cancer, the payout is determined by the severity of the illness. A higher payout is made for stage four breast cancer, with lesser payouts made for stages one, two and three breast cancer, with claims made for stage one cancer receiving the lowest payout. “This means policyholders can make a claim if they progress through the different stages of the illness – rather than only ever being able to make one claim,” explains Dr Phillips. “Macquarie Life Active also enables policyholders to claim for different events. If a policy holder is injured in a serious car accident, and the following month suffers a stroke, they are not excluded from cover for both scenarios.” “We’ve also worked hard to ensure the policy and its documents are set out in plain English to make it accessible to consumers – not just people within the insurance industry,” she adds. According to Pauline Blight-Johnston, severity products will also remove the all-or-nothing claims mentality. “I think hope we’ll see less aggressive claiming behaviour, which is good for policyholders and insurers because it should considerably reduce costs to the industry, which are ultimately passed through to premiums.” Dr Cummins agrees the staged approach to structuring insurance claims and payouts makes sense from a medical perspective. He says, “Although it does vary depending on the illness and the individual, early stage diseases are often treatable. The emotional and financial impact of an early stage illness is also often much less than a later stage illness.”