Improved benefits distinguish this year’s winners

Over the past 12 months most companies have introduced further enhancement to the features included in their risk product range.

The extension of partial benefit payments across a range of trauma conditions, has resulted in partial benefits being payable at an earlier stage.

This increased scope for benefit payment represents a major step forward in the trauma market. The range of diseases covered continues to increase, with cover for a number of additional diseases available for the first time.

Improvements to term products include increases in maximum payment under interim cover benefits, introduction of a funeral assistance benefit and improvements to guaranteed insurability options, with the inclusion of additional events and increased business future insurability events.

Total permanent disability (TPD) definitions have been improved, with the widespread adoption of “unlikely ever” replacing “ever return to their usual occupation”.

Several companies now include an alternative test of 25 per cent whole body impairment within their TPD definitions.

Product evolution in the disability income market has been more subdued in the past 12 months with several companies refining total disability definitions coupled with improvements to ancillary benefits.

2006 risk awards

This year’s adviser panel responses focused more heavily on the key benefits and core definitions offered.

The relative weighting of price also increased this year when compared with the previous year. This has resulted in a higher ranking this year for some existing products.

Several new or revised products have higher premiums, reflecting the enhanced benefits offered, with the outcome that the premium ranking for existing products has improved.

Total scores in the Term and TPD category is heavily biased towards price, with features having less influence on the total score for each product.

The second half of 2005 saw the introduction of the innovative advance payment trauma definitions by ING.

The ING Onecare product was the highest scoring trauma product based on features and definitions. This rich set of features and market leading definitions comes at a commensurate cost. Once price was taken into account, the lower price score moved the ING Trauma product outside the top three.

The category winning product from MetLife benefited this year from an improved price ranking, as some newly released products had higher premiums.

There were several disability products with aggregate scores that were separated by only a few points.

The higher weighting given to definitions at the expense of features elevated the lower cost Asteron Income Protector product to first place. This product continues to be one of the few products that offer a 10-hour definition of total disability.

In the business expenses category, the range of business expenses that will be covered in the event of claim is one of the key differences between products.

The highly competitive nature of the life risk market is reflected in the narrow range of total scores for the risk company of year.

This year Tower topped the scores with a competitive product in each category, including a category winner in the term and TPD category and second place in the disability market.

Mark Kachor is the director of Dexx&r .