Zurich Life Risk Update

Zurich has released details of a significant raft of changes that will be implemented across its various product lines.

Taking effect from 15 May, these changes reflect in part the insurer’s absorption of the three Macquarie Life product ranges that have been re-branded since 1 October last year and have been running alongside Zurich’s existing Wealth Protection flagship range.

With a focus, according to the insurer, on seeking to deliver lower rates and better value, changes/enhancements include:

Zurich Wealth Protection

Lump sum

• Re-shaping of TPD cover options into Essential TPD and Platinum TPD. The definitions have been taken from the former Zurich/Macquarie FutureWise product. The life insured will have the option of ‘Own’, ‘Any’, ‘Domestic Duties’ or ‘Modified’ TPD definitions and will have access to partial impairment benefits if the Platinum option is selected.
• Removal of the basic Trauma option and provision of two cover levels in future: Extended Trauma and Platinum Trauma. Platinum Trauma offers a 25% partial benefit, which was previously made available via a top-up option. The Extended Trauma option continues to offer a 10% partial benefit payment.
• Trauma definitions updated from 1 September 2016 have been included in the new PDS effective from 15 May, which also includes additional Trauma definition updates and extends the definition of Terminal Illness to include ‘death within 24 months’ in line with the changed SIS regulations (up from 12 months).
• All Protection Plus buy back opportunities will now be offered as extra cost options.
• A new business future insurability event has been added to accommodate an increase in the size of a business loan.
• The ‘premium holiday’ option has become more flexible.

Income protection

• The definition of total and partial disability for the Income Protector product (not Plus) no longer requires the life insured to be totally disabled for the duration of the waiting period but requires five consecutive days of total disability. This enhancement is to be passed back to all Income Protector policy holders.
• Greater clarity around the definitions of Total and Partial Disability.
• Introduction of a new Trauma advancement option within income protection.
• Agreed value policies will now always pay at least what would be paid under indemnity cover, so that if the sum insured was inflated at application, the policy owner is no worse off than if they had opted for the indemnity cover option (since they pay for the higher level of cover).

Other product changes include:

• Introduction of superannuation optimser for improved flexibility when structuring cover in superannuation.
• Packaging of Child Cover benefits into separate stand-alone policies, replacing what were previously extra-cost cover options.
• Adoption of the FutureWise Business Expenses product for Zurich Wealth Protection, replacing the existing contract. This will be a stand-alone product option, with a maximum insured benefit of $60k per month.

Zurich Active, Zurich Sumo

The insurer advises its Zurich FutureWise product line will no longer be on sale from August 2017, but that some upgrades will apply to existing FutureWise policyholders from 15 May, including the improved terminal illness definition.

Updates made to the former Macquarie, but now Zurich Active and Sumo brands include:

• Adjustment of commission values to align with those offered within the Zurich Wealth Protection range.
• New Income Protection and Child Cover options within Zurich Active.
• Amended Terminal Illness definitions, again in line with SIS regulations.
• Various updated trauma definitions across both product lines.

Each new PDS takes effect from 15 May. The insurer also notes it will pass back any improved trauma definitions to existing policyholders for new events.  It says this will also apply to the terminal illness definition change and any other relevant improvements that do not have a cost impact.