Policies often cover the breadwinner, but should we be selling more protection to cover events affecting other family members? Greg Becker looks at the Australian answer
Suncorp has realised that once a potential policyholder develops an understanding of their value, the need for cover to mitigate this, the cost to their family in adverse circumstances, and the range of insurable events that they could be protected against, they have a great opportunity to sell cover that applies not only on death.
This is a great example of financial education where people’s needs are explained in a friendly and accessible way.
Following this concept of living benefits, Macquarie has developed a policy with the tag line “Life Insurance Made for Living”, which includes CI and life benefits.
People purchasing life insurance hopefully realise that they will not be able to benefit, and are purchasing peace of mind in the knowledge that their financial duties and responsibilities as a parent or breadwinner will be fulfilled, even in the event of some untimely event.
The rationale of twinning the life and CI benefits is that the beneficiary purchasing the product would not receive the life insurance benefit, while they would benefit from the CI payment.
Bundling aside, could these “living” benefits be used to play to our selfish side?
Some might argue it is poor taste to put a number on the value of a parent. Legal and General has done some very useful research into trying to quantify the “value” of a parent.
Its aim was not to reduce people to numbers, but to find a way to objectively consider the implications of untimely trigger events on a family in the hope that this could stimulate some into obtaining adequate levels of cover.
L&G estimates that a mum is valued at £32,000 per annum, a dad at £21,000 and that a child costs £143 per week. Suncorp’s calculator suggests that an Australian domestic goddess costs a lot more.
While we would certainly not want to encourage the view that Aussie mums are more valuable, we should encourage a reappraisal of our protection needs, those of society and those we target in our sales and marketing. Dads are often covered through work, but are we thinking about mum enough?
Greg Becker is product development actuary at RGA
