COVID19: RiskInfoNZ magazine asks life insurers about their approach to underwriting new insurance applications, and measures for customers facing financial stress, including premium waivers. Read more
Check out the Financial Services Council (FSC) FSC Code of Conduct* that has the nine standards which fall into three core objectives covering: principle ethical standards, consumer information and communication, and delivering good outcomes to consumers. (*This is a industry code for FSC Members only (mainly made up of Life & Health Insurers, Investment Funds), and is designed to support the professionalism of the financial services industry and the FSC members. It is about increasing trust and confidence in the providers of financial services and the products they deliver.)
Check your policy and be clear about what it does and does not cover
Get a copy of your policy and ask questions about the cover to ensure it is right for you. Trauma insurance, for example, doesn’t cover traumatic events. It will only cover certain specified life-threatening health conditions as set out in the policy e.g. only defined cancers and heart attacks.
Check your policy exclusions and limitations
Declined claims due to exclusions are a common complaint to the IFSO Scheme. A life insurance exclusion could be death caused by dangerous or illegal activities. An income protection limitation could be the cover only applying for a limited time period.
Always provide full and accurate information about your medical history
Give your insurer full details of your medical history. Don’t guess. Even if you accidentally leave out details, your future claim could be declined, and your policy treated as though it didn’t exist. Your insurer will not usually get a copy of your medical notes. It’s a good idea to get your own copy of your medical notes to either give to the insurer or to refer to when filling out the insurance application forms.
Premiums for life, trauma and income protection insurance can increase as you get older
It is important for you to know the ongoing cost of your life, trauma or income protection insurance. Some policies have a fixed cost, while others will increase as you get older (stepped premiums). Ask questions about the future costs of the insurance to avoid surprises.
Know the risks if you want to change to a new policy and insurer
If you change your life, trauma or income replacement insurance, the new insurer will take into account your full medical history up to that date. This may mean you are not covered for medical conditions your current policy would cover, exclusions could be added to your new policy, or you could pay more in premiums. It is important to understand the risks of changing cover, particularly if you have had any changes to your health.