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Forward Thinking Magazine : August 2010
10 Macquarie Adviser Services “But someone with an advanced disease, who requires prolonged treatment, usually faces much higher costs than someone with an early stage disease. So it makes sense for them to receive a higher payout to meet their higher financial needs. It’s also beneficial and pragmatic that receiving a payout once for a particular disease doesn’t exclude you from future payouts for the same disease.” “The policy also closely matches medical convention. For example, women who suffer breast cancer are at a much higher risk of developing cardiovascular diseases as a result of the breast cancer treatment. You need to be able to claim for both conditions – Macquarie Life Active allows you to do this,” says Dr Cummins. Although severity-based products have received criticism for their complexity, James Louw says policyholders intuitively understand the principle behind them. “Just because policy documents are lengthier doesn’t make them more complex. But if a policyholder knows he will only receive payment through his policy if he receives treatment, this could influence the decision of whether or not to undergo surgery, potentially exposing the policyholder to unnecessary intervention. Macquarie Life Active is also structured around clear definitions, which provides greater transparency of policies as well as helping to remove the subjectivity from claims assessment – steps that go a long way toward giving consumers confidence in, and a better understanding of, their policies. “We’re very transparent about the payout for different diseases and traumas. For example, we have clear disclosures around the payout for a heart attack or stage two cancer,” advises Dr Phillips. According to Dr Cummins, the clear definitions set out in Macquarie’s Life Active policy reduce the subjectivity associated with assessing claims. He says that being able to evaluate “very practical considerations, like whether the policyholder can sit, squat, bathe or drive a car” makes it much easier to make a claims assessment compared to more traditional policies. “Severity-based products allow doctors to be doctors, not claims assessors,” says Pauline Blight-Johnston. “Assessing claims on observable medical conditions makes the assessment process much more objective and hopefully easier. This should save doctors time and allow them to focus on what they are good at, which is treating patients.” In Australia, insurers are just starting to approach insurance from the consumer’s perspective and it’s likely the insurance industry will undergo significant change in coming years, at least if the experience in other markets is anything to go by. James Louw says there are now hybrid products in South Africa that allow policyholders to make a claim either under a medical-definition basis, or using the policyholder’s ability to return to work as the basis for making a claim. “In South Africa, life insurance is also integrated into health insurance,” he says. It will be interesting to see whether Australian life insurance products follow a similar path in the future. In South Africa, life insurance is also integrated into health insurance... It will be interesting to see whether Australian life insurance products follow a similar path in the future. James Louw Policyholders see that it makes sense to receive a lesser amount for a minor event and a more substantial payout for a more serious event.” In some circumstances, Macquarie Life Active also allows holders to make a claim for a diagnosis, rather than just for treatment. This is important with diseases such as prostate cancer. An increasing number of patients are not necessarily being treated straight away for prostate cancer.