Asteron moves to plug insurance gap
Jane Power
In a move Asteron believes is market leading, the insurer will increase its maximum sum insured for total and permanent disability (TPD) insurance to $3 million from February 2007.
Responding to widely referenced research showing a significant underinsurance gap among the Australian population, along with growing personal debt levels, the increased sum insured is around $500,000 higher than the previous industry benchmark.
A client’s required level of TPD cover is usually determined in consultation between an adviser and the client, but it was previously capped at $2.5 million.
Research commissioned by Asteron, including focus groups and surveys, identified the need for the increase.
In developing the enhancement, it also referred to a study by the Investment and Financial Services Association, which found the mid30s demographic displays the highest debt-to-income ratio, and the 31 to 35 year-old subset are most at risk of being underinsured.
“When there are mortgages to pay and dependant children still at home, the main income earner in the household simply cannot afford to become permanently disabled,” Jane Power, Asteron’s head of product and marketing, said.
While indicating that the business is not expecting all or even a majority of its clients to require such a high level of cover, “as people are taking on greater levels of debt and their asset base is growing there is an obligation to be able to provide adequate insurance cover for them”, David Wright, Asteron’s senior life product manager, said.
“If a needs analysis performed by the client’s adviser shows a requirement for more than $2.5 million, customers can now get that level of cover at Asteron.”
Impacting both standalone TPD policies and those taken out as part of a term life policy, the change applies to the ‘own’, ‘any’ and ‘modified’ occupation classifications.
This latest announcement comes after Asteron updated its Optimum corporate and personal superannuation at the end of last year, introducing family account linking, insurance enhancements for corporate members and new investment options.
Asteron has also flagged further product enhancements to its risk product range, with additional announcements expected in the coming months.
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