Trauma & Income Protection

I was recently referred a client who has a range of personal insurance policies including Term Life, Total & Permanent Disability (TPD), Trauma and Income Protection. The policies were set up via another adviser over 5 years ago and the client’s main concern was that he had not heard from the adviser since the initial policy was taken out and he believed he was paying a hefty premium compared to his partner’s policy.

On review of the policies, I discovered that the client had a 50% premium loading on his Term Life and TPD cover, 100% premium loading on the Trauma and Income Protection and a bowel cancer exclusion on the Trauma contract.

I initially reviewed the existing policies against the market on a like for like basis and it was still in the client’s best interest to remain with his existing insurer due to the type of definitions and products they offer for self-employed clients and the premium remained competitive. The second process was reviewing the existing loadings and exclusion with the senior underwriter to see what could be removed or lowered given the clients current health. I discovered that the reason for the initial premium loadings and exclusion was due to a combination of family history issues with bowel cancer and the fact that the client was diagnosed with Atrial Fibrillation approx. 6 years ago.

An important aspect with the insurance company was that they had a product upgrade 2 years ago where existing clients could apply to upgrade their policies to the new contracts without any medical underwriting. The new contracts also provided more favourable underwriting terms especially in regards to family history issues.

I completed a new upgrade application with the client which also simply involved a copy of the most recent colonoscopy and cardiologist report. After a meeting with the senior underwriter the insurance company agreed to remove all premium loadings and exclusions.

The result:

In dollar terms was a premium reduction of over $2,700 p.a. The client now also has a Trauma policy with full cover in regards to bowel cancer and the new contract also provides greater flexibility in regards to heart attack, melanoma and prostate cancer.

If the clients existing adviser was doing his job and reviewing policies annually, the above result could have been achieved 2 years ago which would have already saved the client over $5,400. More importantly, if the client was diagnosed with bowel cancer in the last 2 years he would not have been covered under his existing adviser.

At Poole Group, all clients receive an annual review to review their policies against the market, review their current situation in line with the level of cover and review any existing loadings/exclusions.