Financial Uncertainty Ahead

We are living through a period of high inflation and global financial uncertainty at a level that most clients have never experienced before

The aftermath of the medical crisis of 2020-2021 caused through Covid, medical personnel layoffs, lack of frequency of screenings and procedures not being regularly undertaken, increased suicides and drug overdoses and vaccine adverse events have all contributed to the abnormal increase globally in the All Cause Mortality tables; the primary driver of premium ratings within the life and health insurance industry.
It is my view that you will experience significant changes in product and pricing within the insurance industry over the next five years

The recent New Zealand NMG Insurance survey highlighted that most purchases were based on price not on product quality. Consumers were not focused on the prize; that of managing their risks adequately.

KSL Insurance’s approach of the past 50 years of selling insurance products has always been, that there is no point owning an inferior contract and being told after a claim has occurred, that…. “for a few dollars more you could have been covered for that eventuality”. This approach has stood the test of time!

– As well as increases in life insurance policy premiums, I predict that there will be:
significant changes to living insurance policy terms and conditions,
– more stringent underwriting,
– higher premiums,
– more frequent exclusions,
– the introduction of cancellable contracts replacing non-cancellable terms, to name a few.

Now is the time, before these changes occur (which I predict will be swift), to immediately review your insurance policies

To recap the changes so far in 2022: 
– Partners Life increased premiums by 12-20%
– Asteron Life has announced an increase in disability income protection policies of 4%
– Swiss Re announced a 10% across the board increase in South East Asian reinsurance rates
– NIB advised a 10% medical  premium increase

Remember that any increase has to be added to the annual age increase which is generally 7-11% depending on the product and your current age if you own yearly renewable insurance policies which increase annually by age and inflation.

Don’t be left wanting by the insurer “gimmicks” 

Insurers are offering ‘bundling’ discounts for multiple policy purchases within the same company / contract (at the expense of quality of product).

This discounting may be overlaid by premium reductions for healthy living, including gym membership and fitbit monitors and/or two months’ free premium at commencement. In the writer’s opinion and experience, the best ‘gimmick’ benefit is to have free access to ‘Best Doctors’ which offers for you to obtain a second opinion on a current health condition diagnosis and treatment from the best doctors worldwide which extends to the insured and spouse, their parents and their children.

“’Best Doctors’ is a service money cannot buy when illness or injury occurs”. 
Kevin Seque

What to do now

The smart money is on undertaking a review with a focus on identifying the best policies and if necessary lowering the sum insured to meet your budget. 
In my opinion, discounts, whilst valid, are not as important as owning the correct medical, life and health insurance policies.

Strategies to consider

Some practical strategies you can adopt to manage your insurance portfolio are as follows:
– Review your insurance risks annually.
– Check your debt levels to ensure they correspond with your insurance protection.
– Check how long your dependency for children, spouse and parents will be required.
– Review your medical conditions and lifestyle habits.
– Review the way you are funding your current insurances.
– Review the insurance products you own. Are they appropriate, have they been superseded or updated, are the sums insured appropriate?
– Convert all or part of ‘core’ insurance to level premium.
– Upgrade policies to the best contract available.
– Manage the premium by keeping the same or less sum insured but owning the best contract available.