Income Insurance product solutions. Structuring with lump sum cover.

Income Insurance product solutions. Structuring with lump sum cover.

The new Income Insurance products launching industry wide, as a result of APRA’s sustainability measures, are going to reduce the income replacement ratio along with some of the additional benefits that have been added to these products over time. This creates a new challenge for Advisers as they consider how they utilise a range of product solutions for clients to provide the benefits and protection they need, at a price point that is affordable.

To support these conversations, we have pulled together some considerations for the role lump sum covers may play when the new Income Insurance products go live on 1 October 2021.

The role lump sum covers (TPD & CI) may play post 1 October 2021.

With the changes to the design of Income Insurance products, there could be an increased need and consideration of complementary lump sum covers such as TPD & CI.

Changes to income replacement ratios for Income Insurance and growing pricing pressure on longer term benefit periods will mean that advisers need to deeply consider the combination of covers that best meet a client’s needs, objectives and overall budget.

Matching shorter term Income Insurance benefit periods such as 2 & 5 years with complementary lump sum covers is expected to be part of the considerations that advisers will make as a result of the changing industry landscape.

Lump sum covers, such as Total and Permanent Disablement (TPD) and / or Critical Illness (CI), provide long term protection and cover for significant costs like mortgage repayments or extra-ordinary medical expenses.

Other unexpected expenses could include things like accommodation, grief support, child support, overseas assistance, bed confinement, family support, or home care. All these and more are included in our Care Support Package which is provided at no extra cost on all lump sum covers as part of Integrity’s Here For You product.

The total income replaced will not be 100%. If your client becomes permanently disabled or critically ill, income insurance may not be enough.

And yet many Australians use 100% of their income each month. So how do you cover all the expenses of managing a sickness, accident or illness that potentially impacts a client’s financial situation?

Critical Illness Cover offers a lump sum payment to manage medical expenses if your client is diagnosed with a specified medical condition which may have an impact on their ability to meet their financial commitments. Together, Income Insurance Cover combined with Critical Illness Cover can provide support to clients financially to cover both household costs, as well as medical expenses.

Higher levels of TPD cover may need to be considered, to help financially support clients if they suffer a significant life-changing illness, accident or injury. Put another way, if your client is unlikely to ever work again, TPD is an option to ensure significant and ongoing medical costs are taken care of as well as any home modification adjustments needed to adapt to their ‘new normal’.

 

Please note: This information has been prepared without considering your personal objectives, financial situation or needs. Before acting on it, please consider its appropriateness to your circumstances.

Integrity Life

Integrity Life

From the newsroom

Integrity’s new pricing, what does it mean for you and your clients?

Integrity’s new pricing, what does it mean for you and your clients?

What are the changes?

Integrity Life takes an industry stand, by removing unnecessary and archaic fees to make it more affordable for everyday Australians to get protected. We have also sharpened our pricing in the following areas:

  • Packages of Lump Sum covers with and without Income Insurance
  • Clients aged 30-50
  • White and light blue occupations primarily
  • 2- and 5-year Income Insurance Benefit Periods

Not every possible client scenario will result in a decrease in premium especially standalone Age 65 Income Insurance. However, our combination of premium reshaping, removal of monthly premium loadings along with our approach to not charging policy fees, 2-year base premium rate guarantee, and laser like focus on efficiency, we believe we’re making the cost to serve clients more attractive for Advisers, which will allow more people to benefit from the value of Financial Advice and the protection of life insurance.

What about monthly premium loadings?

Integrity has also removed unnecessary, additional fees to pay monthly insurance premiums for all new business, another outdated legacy which hasn’t kept pace with changing consumer expectations and experiences. Our GM of Sales, Marketing, CX and Product outlines why Integrity has taken a stand on this important issue. “We believe that clients should be able to pay by the month at no extra cost. The long-standing industry practice of charging additional loadings when premiums are paid monthly just doesn’t stack up anymore. It imposes an unnecessary cost on policyholders at a time when affordability is such a critically important consideration for most everyday Australians. We believe it’s time that we move on from such archaic industry practices and open our industry up to more customers who need the peace of mind of being adequately protected.”

Why has Integrity made these changes?

Our MD and CEO, Sean McCormack said it best “This represents a significant shift in our focus as an insurer towards providing protection for more everyday Australians. As a digital first insurer we have both the capability and modern customer experience that is aligned with what these everyday Australians expect and need in our changing and evolving world. Life insurance can’t remain analog in the digital age, and this is a further step to help provide protection for more Australians. This combined with our laser like focus on operational efficiency for our partners, means we have a compelling proposition to take to mainstream Australia and deliver meaningful benefits to them by being insured with a modern, contemporary insurer.”

I have more questions, what should I do?

Please reach out to your Integrity Life BDM, but if you’re new to Integrity then please contact us here and we would be happy to assist you.

Please note.

This information has been prepared without considering your personal objectives, financial situation or needs. Before acting on it, please consider its appropriateness to your circumstances.

Integrity Life

Integrity Life

From the newsroom

HIV and blood borne disease, what you need to know.

HIV and blood borne disease, what you need to know.

Advances in medicine have meant that people living with HIV (PLHIV) have a life expectancy that is approaching the same as the general population1. In fact, PLHIV who are taking and adhering to antiretroviral therapy (ART) cannot sexually transmit the virus to others2.

Furthermore, with increased education and the introduction of the drug Pre-Exposure Prophylaxis (PrEP), HIV in Australia continues to decline3. Despite the facts, there is still a lot of disproportionate fear in the community which often creates stigma against those with HIV. This can lead to further health issues for PLHIV as well as a reluctance to seek treatment, which further complicates eradicating the transmission of the disease4. Similarly, Hep C also elicits a response that hasn’t kept pace with medical treatments and advancements5.

Below are some common questions we get from Advisers and their clients with Integrity’s position based on the most current research and thinking.

Q: If a medical practitioner needs to be tested for HIV or Hep C, would they be eligible for Income Insurance benefits, as they would be unable to work for up to 6 months, right?

A: The window period for HIV is now 18-45 days with some very, very rare cases taking up to 6 months to show up, so it’s very unlikely they would need to be away from work for an extended period of time. Additionally, the current guidelines6 don’t require a medical practitioner to cease practicing while they are waiting on test results unless there is a very large chance that they know they were exposed to someone who is a carrier for an infectious virus.

For Hep C, a special kind of blood test called a nucleic acid test (NAT) that detects HCV RNA (also called a PCR test) can tell if a person is infected within 1–2 weeks of exposure7.  

 

Q: What if the medical practitioner was advised in an official capacity (by their employer or official Association) that they’re not permitted to work, would we pay a monthly benefit then?

A: Generally, yes. If a medical practitioner is compelled not to work in an official capacity, then we would consider paying a monthly Income Insurance benefit.

Q: If they do end up having HIV or HEP C, doesn’t this mean they won’t be able to work? And therefore, would we pay Income Insurance benefits?

A: Contracting HIV or Hep C in Australia in 2021 is not a death sentence. Medical practitioners living with HIV or Hep C are permitted to continue performing the duties of their usual occupation as long as they are under the care of another doctor and following the prescribed treatment and guidelines. Additionally, due to privacy legislation associations such as Royal Australasian College of Surgeons (RACS) and Australian Health Practitioners Regulation Agency (AHPRA) are not even allowed to ask if a person is HIV/Hep positive as all. Medical practitioners are required to follow universal precautions to prevent the transmission of HIV (regardless of their status).

HIV or AIDS?

HIV (human immunodeficiency virus) is a virus that attacks cells that help the body fight infection, making a person more vulnerable to other infections and diseases. It is spread by contact with certain bodily fluids of a person with HIV, most commonly during unprotected sex (sex without a condom or HIV medicine to prevent or treat HIV), or through sharing injection drug equipment. If left untreated, HIV can lead to the disease AIDS (acquired immunodeficiency syndrome). The human body can’t get rid of HIV and no effective HIV cure exists. So, once you have HIV, you have it for life. However, by taking HIV medicine (called antiretroviral therapy or ART), people with HIV can live long and healthy lives and prevent transmitting HIV to their sexual partners. In addition, there are effective methods to prevent getting HIV through sex or drug use, including pre-exposure prophylaxis (PrEP) and post-exposure prophylaxis (PEP). First identified in 1981, HIV is the cause of one of humanity’s deadliest and most persistent epidemics.

AIDS is the late stage of HIV infection that occurs when the body’s immune system is badly damaged because of the virus. In [Australia], most people with HIV do not develop AIDS because taking HIV medicine every day as prescribed stops the progression of the disease. A person with HIV is considered to have progressed to AIDS when: the number of their CD4 cells falls below 200 cells per cubic millimeter of blood (200 cells/mm3). (In someone with a healthy immune system, CD4 counts are between 500 and 1,600 cells/mm3.) OR they develop one or more opportunistic infections regardless of their CD4 count. Without HIV medicine, people with AIDS typically survive about 3 years. Once someone has a dangerous opportunistic illness, life expectancy without treatment falls to about 1 year. HIV medicine can still help people at this stage of HIV infection, and it can even be lifesaving. But people who start ART soon after they get HIV experience more benefits—that’s why HIV testing is so important.” 8

References.

  1. https://www.nih.gov/news-events/news-releases/science-clear-hiv-undetectable-equals-untransmittable
  2. https://medicalxpress.com/news/2020-11-hiv-australia-declined-years.html
  3. https://napwha.org.au/wp-content/uploads/2019/04/HIV-and-Ageing-in-Australia-New-Frontier-April19.pdf
  4. https://www.acon.org.au/wp-content/uploads/2020/11/HIV-Stigma-Paper_v8.pdf
  5. https://www.healthline.com/health/hepatitis-c/can-it-be-cured
  6. https://www1.health.gov.au/internet/main/publishing.nsf/Content/cda-cdna-bloodborne.htm
  7. https://www.cdc.gov/hepatitis/hcv/cfaq.htm

https://www.hiv.gov/hiv-basics/overview/about-hiv-and-aids/what-are-hiv-and-aids

    Integrity Life

    Integrity Life

    From the newsroom

    You and your clients deserve better. A true partner for life.

    You and your clients deserve better. A true partner for life.

    The latest Adviser Ratings survey has been released and it’s not great news for some large, established insurers. The 2020 survey shows that Advisers are deeply unhappy with the service levels and support they’re receiving. This continues to trend downwards from 2019… despite lots of feedback from the industry. The message from these large, established insurers to advisers is pretty clear. If it were a romantic relationship they are saying “We’re just not that into you.”   

    Time to break-up?

    Why stay trapped in an unhappy relationship when you have choice? Perhaps it is time to break up. Integrity Life brings no baggage to a new relationship. We are digitally enabled and legacy free. We are very proud to be on the podium and ranked second in the industry for adviser advocacy in the latest Adviser Ratings Survey for:

    • Ease in underwriting
    • Platform functionality
    • Insurer competitiveness
    • Adviser support and
    • Overall NPS (pictured).

    In addition to that, we got the highest rating on the charts for both ‘New Adviser Support’ and ‘Easy to understand documentation’ which are two areas we know are important to Advisers.

    As the ‘new kid on the block’ we’re really happy with these results and it’s an achievement we couldn’t have made without the support and feedback from Advisers. We have always believed that listening, learning and then acting on Adviser feedback would be the secret to success, so to have this validated by the largest industry survey of its kind is absolutely wonderful!  

    On behalf of Integrity, I would like to thank all the Advisers who have taken the time to provide their feedback through the Adviser Ratings survey. I hope that over the last 2+ years, Integrity has demonstrated a commitment to co-creating the kinds of product and service models that support Advisers in the ways they need to deliver the best outcomes for their clients.  

    What your business needs is more of you. So, let’s free up your time.

    Our focus for 2021 is to continue to drive efficiency in how we do business and how we work with Advisers, partners and their clients. It’s not just so that you’re not spending time ‘dealing with us’, we also want to support you in having easier client interactions, simplified compliance, and help you manage renewals. We believe that’s what Advisers need.

    Maybe it’s time for you to see other people?

    We would love to get to know you better and you should know, we’ve been working hard on ourselves. So, if you haven’t had a look at Integrity for a while there have been some big improvements you may not be across.

    One of our most recent product updates included enhancements and changes that Advisers requested, with more to follow later in the year. Integrity’s retail products are now more flexible and easier to compare and with additional included value and features. Plus, all this was delivered without any changes to pricing (something Advisers also asked for!) You can read more about this significant update here.

    There have also been a lot of positive changes to improve the application and underwriting process – making it even smoother. Examples include the new paramedical provider panel and Application Concierge – which is speeding up the applications with great initial results.

    Got an idea or feedback?

    We would love to hear from you. Integrity is committed to being the best ‘partner for life’ and that starts with listening. Please get in contact via this form or pick up the phone and we can arrange a time to chat.

    We’re looking forward to delivering even better results with your support – and of course, your invaluable feedback.

    If you would like to learn more about what else we’re up to, I invite you to see how Integrity is the perfect partner – for life!

    Sean McCormack

    Sean McCormack

    Managing Director and CEO

    Attracting new buyers to advice and insurance: exclusive research report.

    Attracting new buyers to advice and insurance: exclusive research report.

    Today we launch exclusive research to help Advisers understand how to attract and retain new customers. Acquisition of new customers and profitability are critical for practices and we hope this can offer part of the solution. In our early testing of the report, we got some feedback we wanted to address upfront, so here are some questions you may have had…

    Are Millennials even profitable to service?

    We know that writing risk is becoming an even more significant challenge on small cases (where the compliance requirements are the same as writing a large case) but what we highlight in this report is that Millennials are up to 40 years old, they are a large cohort that spans a wide-range of ages, and they may not be who you think they are. Additionally, as the dominant workforce, they are creating the expectations on which Advisers and their offerings will be compared. So, it’s worth getting across how they think and behave. We also believe there are opportunities to change the way some practices operate that will drive greater efficiency, thereby reducing operational costs (and increasing profitability), while also appealing to how this cohort prefers to engage with financial services. 

    Why has Integrity done this research?

    We believe that our role in the industry is bigger than just providing products. We believe we have a role in supporting a sustainable industry, in educating clients and Advisers and supporting them personally and in business. This report was commissioned by us because we identified a challenge brought on by COVID-19. As lockdowns happened across the country Advisers found themselves overservicing existing clients while struggling to acquire new ones. We wanted to support new acquisition as a means to help support their businesses.

    What do we do next? 

    We have a range of ideas and solutions, as well as system features, we have already built to support the strategies and ideas outlined in this research. So, when you’re ready to have a chat, so are we. Download the research paper here.

      Integrity Life

      Integrity Life

      From the newsroom

      Why don’t more women have adequate life insurance?

      Why don’t more women have adequate life insurance?

      According to Financy*, just 33% of women reported having any life insurance at all, compared to 48% of men. On this, International Women’s Day, we look at two of the complex reasons why.

       

      Life insurance is calculated by income, not contribution to the household.

      The traditional calculation for how much life insurance is needed is based on your current income, the idea being that if you were to be sick, injured, or die, that is what you would need to be replaced. With women still earning less than men overall (13.4%^ – 2020) according to these calculations, women need less life insurance than men.

      But the value of our life and role in the family is so much more than income. The primary purpose of life insurance is to replace a lost income when a provider of the family dies. So, in this context it makes sense for women to have less insurance than men, but if you think about a couple where the woman both works and does the lion’s share of childcare and household tasks – then the cost if she was unable to work, or if she died, is significantly higher. In fact, women do 72%# of all unpaid work in Australia.

      Therefore, not only would you need to replace the income, but you would also need to replace the work to look after the kids, and the home and everything else that she contributed to the household. This is not something traditional measures take into account.

       

      Stay at home parents may not believe life insurance is for them.

      Traditionally women make up most of the stay-at-home parents in Australia and as we have explored, unpaid work doesn’t always factor into life insurance calculations. However, the financial literacy around the role of life insurance could be stopping more women having an adequate safety net in place. 

      When it comes to life insurance, Rice Warner’s Underinsurance in Australia 2020` report found the current level of insurance held by Australians covers 92% of basic death needs, but only 29% when it comes to total and permanent disability (TPD) insurance.

      As a single parent, experiencing a major injury or illness would have even greater ramifications for both financial, emotional, and logistical support. Having insurance as a single parent, may even be more important than if a partner was available to step in.

       

       

      1. *https://financy.com.au/should-more-women-be-thinking-about-life-insurance/
      2. ^https://www.wgea.gov.au/publications/australias-gender-pay-gap-statistics
      3. #https://womensagenda.com.au/latest/women-undertake-72-of-all-unpaid-work-in-australia-the-consequences-are-egregious/
      4. ` https://www.ricewarner.com/new-research-shows-a-larger-underinsurance-gap/
      Integrity Life

      Integrity Life

      From the newsroom