Macquarie Launches ‘Severity-Based’ Insurance Product

Macquarie Life has opened the door to a new insurance product for the Australian market with the launch of Macquarie Life Active.

Macquarie Life Active is an all-in-one proposition that combines Death, TPD and Trauma insurance into a single product that will cover all major health events, death and terminal illness.

The key differentiating feature of this product is the potential for multiple claims to be paid…

The key differentiating feature of this product is the potential for multiple claims to be paid on the policy, where the eligible health events pay a tiered lump sum, based on:

  • The seriousness of the condition (determined in consultation with the client’s doctor)
  • The impact on the client’s income
  • The additional costs associated with the condition

Head of Macquarie Life, Justin Delaney, said Macquarie Life Active will increase the breadth of eligible trauma events covered and at a reduced cost, due to the tiered nature of most of the claims.

The range of health events covered under Macquarie Life Active extend beyond those of traditional trauma insurance policies, because:

  • Lower level, less severe health events may be included
  • The focus is on the impact of the condition on the client, rather than on the condition itself, for example the impact on the client’s activities of daily living
Macquarie Life Active will pay benefits that match the client’s needs…

According to Macquarie Life’s Head of Underwriting and Claims, Sally Phillips, Macquarie Life Active will pay benefits that match the client’s needs, adding that the insurer sees this as a ‘living’ product that offers comprehensive cover at fair value.

Macquarie also says greater clarity is possible with its new product.  Using the management of TPD claims as an example, the insurer points to the difficulty often faced by doctors and claims case managers in determining whether the claimant satisfies Any or Own occupation TPD definitions.  Under its new product, Macquarie says this issue will be reduced or eliminated.

There is no maximum cover limit on the death and terminal illness components of the policy, while health event cover extends from $100,000 to a maximum of $3 million.

Income protection and child insurance cover can also be added onto the core policy.

Severity-based insurance policies were initially launched in South Africa and refined in the UK market prior to the launch in Australia of Macquarie Life Active.

Macquarie reports that severity-based policies in South Africa have proven extremely popular, having taken three years from the launch of the first severity-based product to the point where all retail insurers now offer this style of contract.

A national roadshow will visit all mainland capitals and key regional centres later this month as Macquarie unveils its latest initiative to the adviser market.

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