Asteron has just completed its national roadshow to launch Issue 2 in its Asteron Lifeguard series.
A new PDS (Issue date: 15 April 2008) becomes effective from 28 April 2008 and contains a string of new initiatives and enhancements.
Whereas the 2007 Lifeguard launch concentrated on changes to lump sum products, this year’s update focuses on initiatives associated with income protection insurance.
The key income protection initiatives, together with other product and services enhancements, are detailed below:
Income Protection Products
Asteron has restructured its income protection range and will now be offering a three-tiered product structure that is intended to cater to a broad spectrum of occupations. The three income protection products are:
- Income Advantage
- Income Protector
- Income Shield
Income Advantage
According to Asteron, Income Advantage now offers a ‘first to market’ product initiative, intended for white collar professionals seeking the best cover available. The key factor within Income Advantage is the introduction of Asteron’s 10 Hours Plus definition, which combines both ‘10 Hour’ and ‘1 Duty’ clauses (previously the client needed to select either/or at application).
This definition (also available under Business Expenses for white collar occupations) is seen by Asteron as the most comprehensive definition of Total Disability in the Australian market. The key policy wording reads:
We will consider you to be severely disabled if, solely due to sickness or injury:
- you are not working in any gainful occupation; and
-
you are unable to perform one or more of the important income producing duties of your usual occupation,
as long as you are following the advice of a registered doctor in relation to that sickness or injury.
OR
you are working; and
- you are working in your usual occupation or a gainful occupation for 10 hours or less per week; and
- you are unable to perform the important income producing duties of your usual occupation for more than 10 hours per week,
- as long as you are following the advice of a registered doctor in relation to that sickness or injury.
Interestingly, Asteron advises it considered offering the choice of definitions at claim time, but that this potentially presented a number of issues, such as:
- What happens if the client’s circumstances change and the wrong choice is made?
- What happens if the client has suffered a disability where they are not in a fit state to make a decision about which definition under which to claim?
Asteron believes this comprehensive, ‘either/or’, definition provides greater flexibility for the client in making available the ‘best of both’ approaches.
Other enhancements to the Income Advantage product include:
- Retraining Benefit - Asteron has improved its retraining benefit to extend to 12 months (previously 9 months).
- Income Update (Agreed Value) - Asteron has made its medical free increase benefit available to Agreed Value policies as an in-built feature without any price increase.
- Offset Provisions - Clarification that should offsets apply, the only other insurance policies that will be offset are those that were not disclosed at time of application.
- Statement regarding blood borne diseases for Medical Professionals - Clarification on how Asteron will assess the impact of HIV/AIDS and Hepatitis B and C on medical professionals.
- Interim Cover Limits - Increase to the maximum monthly benefit available throughout the application stage by increasing interim cover limits to $10,000 (previously $5,000).
Income Protector
Income Protector is positioned to offer income protection cover for tradespeople through to the white collar professional who may not require the more comprehensive Income Advantage product features and definitions. Income Protector offers the 10 Hours definition and requires seven days of ‘severe disability’ prior to becoming eligible to claim a Total Disability benefit.
Other enhancements to the Income Protector product include:
- Pre-Disability Income - For Agreed Value policies Asteron will include the previous 12 months income prior to application when determining a client’s pre-disability income.
- Partially Disabled Benefits - Increase to the amount of Partially Disabled Benefit payable if offsets are applied by increasing the maximum benefit limit to 100% of pre-disability income (previously restricted to 75% of income).
- Interim cover limits - Same as Income Advantage.
- Retraining Benefit - Same as Income Advantage.
- Income Update (Agreed Value) - Same as Income Advantage.
- Offset Provisions - Same as Income Advantage.
- Statement regarding blood borne diseases for Medical Professionals - Same as Income Advantage.
Launch of Income Shield
Income Shield offers a more basic level of income protection cover and is designed for two main market segments:
- Self managed superannuation clients
- Price sensitive clients
Income Shield offers lower premiums with a 12.5% discount against Income Protector and applies the 10 Hours definition, together with a requirement that the client does not work for 14 days and is severely disabled throughout the waiting period for both Severe and Partial Disability claims.
New Optional Benefits
Asteron has introduced two new optional benefits:
- Recovery Booster Option - Designed to allow 100% income cover for up to two years if the claim is as a result of a listed crisis event.
Asteron cites the example of rather than topping up cover (to compensate for the difference between 75% and 100% of lost income) via a trauma contract, the client can opt for the Recovery Booster feature, which will pay the benefit for over 30 listed crisis events, the premium for which will be deductible, as it is regarded as income protection for tax purposes.
Available across all income protection policy types.
- Extended Waiver of Premium Option - While all Asteron Income protection products waive the premiums of the income protection policy during a disability claim this option will also waive premiums for the life insured across any Lifeguard lump sum policies they have with Asteron.
Available on Income Advantage and Income Protector.
Lump Sum Products
Lump sum product enhancements include:
- Increase in maximum TPD cover to $5 million ($7 million with modified TPD cover included in the Recovery benefit).
- Cover in excess of $3 million may be topped up by modified TPD of up to $2million.
- Introduction of new medical free trigger events for lump sum:
- Increase in value of a Key Person (Business Insurance)
- Loss of taxation dependents (Life Cover Super)
- Update to Guaranteed Renewability - treatment of Unemployment - Asteron has made changes to the definition applied to claimants who have been unemployed for more than 12 months. This change means the company will no longer change the Own Occupation definition to Any Occupation at any time and will continue the Own Occupation definition while the policy remains in force.
- Own Occupation TPD enhancement - When a client has recently changed employment and becomes Totally and Permanently Disabled, the client will now have the choice to have their disability assessed against either their current occupation or the occupation they were in at the time of application.This benefit is available within the first three months of any occupation change. After a client has been in a new occupation for more than three months that occupation only will be assessed as their own occupation.
- Future Cover Benefit - When a Recovery Stand Alone or TPD Stand Alone policy expires without a benefit having been paid Asteron will automatically convert some or all of the policy to a Life Policy with modified TPD. Asteron has increased the maximum amount that will be converted to $200,000 (previous conversion maximum was $50,000) or the sum insured at expiry, whichever is lower.
Pricing Changes and Initiatives
Asteron reports there have been no underlying changes to rates for its existing products, but there have been initiatives regarding large sum insured and multiple application discounts:
- Large sum insured discounts across multiple policies - Where the client is the life insured of two or more of the same policy type Asteron will recognise all of those policies when determining large sum insured discounts.
Asteron advises this initiative is intended to offer significant opportunities for clients who wish to split their insurance cover between super and ordinary, business and personal.
- New lump sum multi-application discount - Discounts base premiums by 5% when two or more lump sum policies of a different type are applied for.
These initiatives complement Asterons’ existing discount features where the client applies for both income protection/business expenses and lump sum cover (5%) as well as for multiple life discounts (between 5% and 10% depending on the number of lives insured).
Other Initiatives
Client Loyalty Rewards
Client loyalty rewards have been enhanced with increases in the amounts payable for the Funeral Advancement Benefit (Life and Recovery products) and the Limited Death Benefit under TPD stand alone and Recovery products.
Special Underwriting Offer for Key Occupations
Asteron is making available a special underwriting offer for newly qualified general medical practitioners and barristers:
Available Cover (Income Advantage, Income Protector and Income Shield):
- Guaranteed maximum benefit of $6,250 per month (without the need to provide any financial evidence).
- Agreed Value contracts are available with Financial Endorsement.
- Indemnity contracts are also available.
- Mandatory medical and financial evidence waived but subject to underwriting and disclosures on personal statement.
Available Cover (Recovery Package and Recovery Stand Alone):
- Maximum sum insured is $500,000.
- Death and Own Occupation TPD are included in the Recovery Package.
- Mandatory medical evidence is waived but subject to underwriting and disclosures on the client’s personal statement.
Income Protection Medical Free Increases
Other underwriting enhancements include new medical free increases (Income Update Benefit) for agreed value policies as an in-built benefit. This will allow annual increases in the monthly benefit of up to 10% to a maximum of 100% of the initial monthly benefit or $20,000. Asteron Indemnity products already includes the Income Update benefit.
Equate V 6.0
Asteron’s Equate quotation service package has been enhanced to better serve advisers’ businesses by adding new tab views of client quotes, new service features and enhanced functionality including:
- The ability to quote multi lives, multi applications and multiple covers at the same time with easy navigation between multiple Equate illustrations
- Commission calculator for easy SOA referencing
- Details of all discounts including multi application, multi lives and large sum insured.
Asteron has also enhanced adviser access and tracking on their client’s details for both inforce policies as well as for policies within the application/suspense process.
