CALI’s open-ness to the prospect of consumers being offered the choice to modify their cover for mental health conditions – including opting out of that cover for affordability reasons – forms the basis for our latest poll.
The council’s position on this issue was articulated within its broader response, released last week, to Peter Kell’s recommended changes to the Life Insurance Code of Practice (see: CALI Supports Customer Choice…).
The life insurance industry has been debating, considering, reflecting and agonising over the critical sustainability challenge confronting the sector, exacerbated in this modern era by the alarming increase in the incidence of mental illness within the Australian community and a corresponding and significant spike in the volume of IP and TPD claims due to mental ill health (see: TPD Claims for Mental Health Jump Up to 700%).
Riskinfo has reported initiatives released by insurers in the last 12-24 months intended in part to address the impact of the rise in mental health-related claims while ensuring all policy holders continue to retain appropriate insurance coverage for their needs. For example:
- AIA Launches New TPD Offer
- TAL Updates Flagship Product
- ‘Mix’ ‘n’ Match’ TPD Option From Acenda
- Zurich Launches New TPD Option
With the strong proviso – as emphasised by CALI – that any future opportunity for a consumer to opt out of mental health coverage should be informed and voluntary and supported by appropriate safeguards, do you support this possibility?
Or, do you think such a choice may come back to haunt the adviser down the track? Do you think the significant benefits associated with delivering affordable IP and TPD cover in particular would be offset by potential future litigation in circumstances where the client’s mental health cover opt-out decision has not been clearly and unambiguously articulated and agreed?
In what remains an ongoing dilemma for a sector seeking to find a sustainability solution while continuing to ensure all consumers have access to the cover they need, tell us what you think and we’ll report back next week…
