September 25, 2017
September 25, 2017 | Risk Pulse
Are your clients prepared for the cost of survival
Australians have never had a healthier standard of living in its relatively short history. Medical advances and technology has come leaps and bounds in the past 20 years, and as we sit on the cusp of the fourth industrial revolution, we can expect this to boom once again, taking us into an uncharted health and lifestyle horizon.
We are getting healthier and living longer – 12 years longer than the global average, in fact – however, the gains in medical and health science are also resulting in more and more Australians being medically managed through their illness and recovery over longer periods of time, where in the past some more serious conditions were akin to a death sentence.
This is not a bad thing, of course. It does raise the question however, of the sustainability of traditional trauma products that pay out a lump sum to cover “severe” one-off health events.
Example: the changing case of cancer
One commonality most advisers and clients share is they know of someone who has either passed away from cancer, or has at least been diagnosed. In fact, in 2017 alone the estimated number of new cancer cases in Australia sits at 134,174. 
One of the types that has seen the biggest increase in survival rate is prostate cancer. Though it remains one of the largest killers of Australian males, we can attribute this large increase in survival rate to the general community awareness around the signs and symptoms of illness, and readily available test and screening methods.
Detecting cancer at an early stage means that treatment is much more likely to be effective and also – in many cases – allows for more treatment options. However, it does also increase the costs associated with treatment for an ongoing condition, which may not have been factored in a traditional insurance policy.
The new generation of life insurance
This is why forward-thinking insurers are starting to move towards a new generation life insurance product – severity-based cover.
With Zurich’s severity-based cover – Zurich Active – your clients are covered for what are called ‘health events’, which offer more definitions than any other trauma policy as up to five payment amounts payable for a condition.
A great advantage of this is that the benefit payable for any covered health event depends on how severe the condition is. This is determined by using a tiered benefit category, A (most severe/higher claimable benefit) to E (least Severe / lower claimable benefit). By matching this flexibility with a large range of payment percentages (from 5 – 100 percent), it becomes easier to qualify for some sort of benefit. This translates into a product which often pays claims that a traditional product wouldn’t. A point reinforced by our own analysis that showed up to 24 percent of claims paid under Zurich Active would not have been paid under a traditional product.
Put simply, severity-based cover is a more flexible style of cover. There are more mechanisms built in to ensure clients can claim on a broader range of conditions and claim multiple times if the severity of the illness progresses, or they suffer another medical condition.
For cases such as prostate cancer, severity-based cover is a true benefit. With early detection and an advancing understanding of prevention and treatment options, clients now have the ability to claim during the less severe stages of the illness, giving them access to funds that they would not otherwise have been entitled to under a traditional trauma product.
What if the client's cancer returns?
With, severity-based cover you have the flexibility to make multiple claims across the life of the policy, and because it uses the health event criteria during assessment, as the medical technology advances in the years to come and Australia’s health landscape continues to improve, severity-based cover will remain as relevant as it did from day one and provide the flexibility and certainty the client is searching for in a modern day insurance product.
Zurich is proud to be the first life insurer to bring this innovative style of cover to market, with Zurich Active – cover that plays an active role in your clients’ finances when they need it most. To find out more, contact your Zurich BDM on 1800 252 650.
This information is dated September 2017 and may be subject to change and does not take into account any personal objectives, financial situations or needs. You should consider these factors, the appropriateness of the information and the relevant Product Disclosure Statement (PDS) before making any decisions or recommendations.