Risk cover in black and white

Unlike the majority of term and total and permanent disability (TPD) products, Protection Life from Aviva is payable after three months rather than six. According to Tim Cobb, general manager — product, this is a “key differentiator”.

In addition, Aviva has recently increased the maximum term illness benefit to $2 million from $1 million.

This, and other features, has seen Protection Life named the best product in the term and TPD category of the Money Management/Dexx&r Adviser Choice Risk Awards.

Cobbs says a huge range of changes have been made to the product in the last 12 months, with improvements being driven by the needs of advisers.

He explains: “One of the things we did was add some activities of daily living definitions (ADLs), which means it is much easier for an adviser to talk to a client and say ‘here it is in black and white; this is when you would be able to make a claim, and this is when you wouldn’t’. So we’ve got that as an underpin, and that is one of the things that has gone down quite well.”

Cobb believes there is a drive within the sector to explain products better.

He says: “Using the ADL example, it’s easier for people to see when they will be covered and when they won’t. Because, from our point of view, we want to be able to pay claims quickly when people are entitled to them. And when people aren’t covered, we want them to know in advance so everybody’s clear.”

Premiums for term, or life, cover have reduced significantly in recent years, not necessarily due to increased competitiveness in the marketplace, but because actuaries can now make better predictions on mortality rates.

David Callander, chief executive officer — risk at Tower Australia, finalist in this category, says: “Life insurance, or death cover basically, is something that has been sold for a very long period of time. When we look down the track 20 years, we can be relatively sure that we know how long the average person is going to live for.”

The Life Protection Plan offered by Tower has been relaunched twice in the last 18 months, and according to Michael Downey, head of risk products and strategic marketing, pricing for this type of risk insurance is still a key factor in take-up.

He says: “It’s one of the main tickets to the game. You won’t get on the recommended lists if your product doesn’t stack up for benefits and features and pricing.”

But he adds: “Advisers now are also looking for support services — how good is your underwriting, how consistent is your underwriting methodology, and do you have a good claims manager?”

MLC’s Life Cover Standard was also named as a finalist in this award.