riskinfo » News » AXA Update July 2008

AXA commenced the second half of 2008 with an update to its risk products range, which is number 4 in this series (Issue date of PDS: 14 July 2008).

This was the first product update released to the market under AXA’s new Head of Individual Life Insurance, Stephen Rosengren and new Product Manager for Individual Life, Tim Tez.

While the timing of this release was in keeping with AXA’s standard product cycles over recent years, it iwasalso well timed, given the lead up to the recently completed Beijing Olympic Games, for which AXA is a major sponsor and Official Partner of the Australian Olympic Team, through to the London Games of 2012.

This current update presents 20 separate product and pricing initiatives, including an extensive premium rates review and an income protection initiative for the growing number of temporary visa holders working in Australia. These and other enhancements are outlined below:

Pricing

AXA’s review of premium rates and discounts covered both lump sum and income protection products and focused on delivering competitive stepped and level premium solutions for those aged between 35 and 50.

The review looked in particular at AXA’s level premium tables, where reductions have been made. According to Mr Rosengren, “One of the easiest traps to fall into when looking at life insurance is opting to take a stepped premium because it is cheaper in the first instance. We often hear of clients on stepped premiums cancelling cover at older ages because the cost increases each year.

“Whilst level premiums are more expensive initially, over time they are a cheaper way to purchase insurance, and are more affordable as you reach retirement age.”

Other pricing changes include:

AXA’s Workplace Rewards premium discount scheme has been extended to cover immediate family members
Enhanced large case discounts across all product types
Maintenance of the 15 BELOW campaign, which offers additional premium discounts on lump sum products for clients aged between 55 and 60 next birthday, for sums insured greater than $750,000

Life and TPD Cover

Enhancement of the premium waiver option definition to cover claimants who are totally and temporarily disabled (previously this optional benefit only applied for those who had become totally and permanently disabled)
Removal of the $2 million cap on payment of a terminal illness benefit, which can now match the life cover sum insured
Introduction of a partial TPD benefit for insured clients suffering the loss of the use of one hand or foot or entire sight in one eye (pays the lesser of 25% of the TPD sum insured or $250,000)
TPD cover for clients over age 65 enhanced by an extension to the ‘specific loss’ definition as well as the introduction of a significant cognitive impairment clause through to age 99, to accompany the existing ‘future care’ clause

Trauma Cover

Clients holding a Comprehensive Cancer option in their policy can now be eligible to claim a full trauma benefit on prostate cancer classified as T1 which requires major interventionist therapy (previously only a partial benefit was payable on this diagnosis)
Triple Vessel Angioplasty: The requirement that coronary arteries be blocked by at least 50% to qualify for a benefit under this event has been removed
Cardiomyopathy: A client must no longer be permanently unable to work to qualify to claim for this benefit
Benign Brain Tumour: Clients may now qualify for a benefit under this even if they are unable to perform at least one of the activities of daily living
The maximum amount payable under a partial trauma benefit has been increased to $100,000 (previously $25,000) for the following trauma events:
- Angioplasty
- Multiple Sclerosis
- Muscular Dystrophy

Income Protection Insurance

For AXA’s Income Insurance range, the major initiative the company highlighted was its offer of income protection insurance to category 457 visa holders under the terms of its standard income protection contract. AXA reports it is the first insurance company in Australia to offer this facility, where its research found that there are now over 83,000 skilled temporary visa holders currently living and/or working in Australia.

Mr Rosengren commented “Until now, there was no standard offer available to this category of migrant, so each insurance application had to be considered on a case by case basis. We are pleased we are able to find this solution and to offer income protection to this growing proportion of our population.”

Mr Rosengren added “This is not a short term measure either; we will also make it easy for temporary visa holders to continue their insurance cover when they take up permanent residency.”

Other income protection product initiatives include:

Introduction of a new ‘Professional Package’, available for eligible Income Insurance Plus policy holders whose occupation is classified as MP, AA or A. Payments will not be reduced during the first six months of claim if the insured has returned to work in a reduced capacity of less than ten hours per week. There is also no requirement that the claimant must have experienced a period of total disability in order to claim for a partial disablement benefit.
Changes to definitions of Total and Partial Disability, in which the ‘Own Occupation’ definition will be available for the entire benefit period for most occupation categories (previously, the Own Occupation definition applied for the first two years only)
Enhanced Offsets clause, where the benefit will no longer be reduced by payments made under legislation - for selected medical professionals, other professionals and sedentary white collar workers
Maximum monthly benefit increased to $30,000 (previously $25,000)
Enhanced Pre-Disability Earnings clause (for agreed value contracts), where the earnings are now calculated from the highest average monthly income in any consecutive 12-month period between the start of the disability and two years before the policy commenced
Improved application of AXA’s underwriting guidelines, in which high net worth white collar clients may be classified as AA if they fulfill specific criteria

Electronic Applications

AXA’s electronic application service has been enhanced by the introduction of an electronic medical authority facility. This allows the follow-up process for AXA’s preferred medical requirements provider, UHG, to become more efficient.

This is AXA’s first risk products marketing campaign that links to the Olympic Partner programme, and we should expect more over the coming months and four-year period leading to the 2012 Olympic Games.

This particular update has seen AXA seeking to deliver four key elements to advisers and their clients: