Income protection costs more for ladies
Women pay more than twice as much for income protection insurance as men because they make more claims for mental health and stress-related conditions, say insurance companies.
As the insurance industry reports a big rise in the number of New Zealanders taking out income protection policies, premium schedules show women pay significantly more for the products.
For example, a 35-year-old non-smoking man insuring a $65,000 annual income will pay $39 a month for an AIG Life IP policy. A 35-year-old woman with the same profile will pay almost $85.
Premiums go up with age for both sexes, but the disparity remains – at 50 the man will pay $129 a month whereas the woman will pay $270. AIG said it had always been the case that women made more stress-related claims. These claims were expensive, hence the difference in pricing.
In the most recent study to date which was undertaken in 2002, 30 per cent of claims made by New Zealand women on their income protection insurance were for mental/nervous conditions. For men that figure was 16 per cent. There was no reason to believe the trend had changed, and more recent studies in Australia showed a similar breakdown.
For men the major cause of claims was accidents but women did not make many accident claims.
Mental health and stress-related claims tended to run for much longer and were harder to terminate, and so this was built in to the pricing.
“You can see when a leg is well and somebody can go back to work.
“I can’t really tell if you’re not depressed any more.”
Insurance companies simply looked at where they were incurring the most claims and did not necessarily try to explain the trends. “It really all comes down to what an actuary thinks the expected claims are going to be.”
Why women would make more stress or mental health-related claims at work does not appear to have been well researched so far. Investment Savings and Insurance Association chief executive Vance Arkinstall said he was not aware of the disparity.
A spokeswoman for insurer ING said its income protection premiums were higher for women, but this was because women made more claims across the board.
The Attitude NZ survey released this year by research company Perceptive found that women reported higher levels of stress than men in all areas including saving ability, retirement security, job security, quality of life and health and well-being.
Auckland University associate professor of economics, Susan St John, said the private insurance industry differentiated by gender because it was allowed to and it was easy, not because there were necessarily two risk groups.
If there were a unisex pool of insured people the risk would be spread. “In this case the risk discrimination is simply by gender, which is a crude risk discriminator.”
A survey of 1000 New Zealanders released last week by AIG Life showed 23 per cent have income protection insurance, compared with 13 per cent two years ago.
If you are looking for sound life insurance advice, contact Denis Thorner on 0274 575 190 or email denis@thorner.co.nz Denis provides advice to clients New Zealand wide.
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Denis Thorner recently won the Best Trade/Service Business Award at the 2009 Upper Hutt Business Excellence Awards, he belongs to the PAA and is a life long member of MDRT
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Click here to email Thorners or Call Us on (04) 528 8088
Easing The Squeeze – 3 Key Review Areas
The current financial climate is proving to be a difficult time for many of us at the moment and I am finding that many of my clients are trying to get through by juggling their finances but they are still not making headway.
I am here to help you and my valued clients and I have taken the opportunity to note three key areas where I can offer assistance to review your circumstances.
Many of us have mortgages on a variety of interest rate options. You may be unaware but a considerable portion of my business involves home loans. I am able to assist with new purchases, top ups to clear existing high interest rate HP’s and credit cards, refinancing existing home loans and advising on fixed interest rate rollovers.
I can currently obtain 12 month fixed rate lending at *5.80% p.a. and a floating rate of *6.80% p.a. with no application fee for refinances, no ongoing re-fixing fees for fixed rate lending and no bank transactional fees. Rates continue to move and we can expect further movement in the next few days. You should contact me before making any home lending decisions.
Call me to discuss your home loan options – you may be surprised how simple the process to change provider can be and the amount of the savings to be made from some subtle restructuring.
We all want to provide cash for our loved ones by having a combination of Life, Trauma, Medical and Disability Income insurance but balancing premiums against our budgets can be an ongoing battle.
In recent times, many insurers have reviewed their premium structures and I am able to offer some extremely competitive pricing especially for top up Life and Trauma Insurance. By reviewing your Medical insurance excess and the wait period on Disability Income cover, it may also be possible to extend the extent of your cover.
If you are looking for large long term Life insurance premium savings and the ability to retain policy affordability well into retirement, then you need to be on the “Level Premium” option for some of your Life cover.
Please allow me to quote and show you the difference levelling can make to your life premiums.
The membership of KiwiSaver continues to grow with over 900,000 current members. I believe in the benefits of KiwiSaver and feel only those Kiwi’s who do not understand it are not members.
From 1 April 2009 members will be able to contribute 2% of their income, down from 4%. This increases affordability and you should discuss your options with me either before joining or before altering your contribution rate.
I would also like to point out that the membership opportunities for children and the nearly retired under 65 year olds are tremendous. Where else can you get $1,000 for free and no need to contribute further if you are not working? Self employed workers not on a PAYE deduction basis for their tax also have the opportunity to contribute as little as $20 per week to get the Government’s match of up to $1,043 p.a..
Speak to me soon about the benefits of KiwiSaver for your personal family situation.
These are only three key areas where I may be able to help you to “Ease the Squeeze”. My website www.thorner.co.nz contains other information and I would recommend to you and your family to browse the information and informative blogs on the website
As an incentive to view the web site, I am offering a free scratchy to the first 50 people to complete the Lifestyle Check and to respond by answering the following question using the “click here to email us” line at the end of the Lifestyle questionnaire…
How many questions are there in the web based Thorners Lifestyle Check?
Any client having a new “Level” Term Life policy issued before 30 April 2009 is also in the draw for a carton of Whitehaven wine – there has never been a better time to talk to me!
As you can see – there is plenty of scope for optimism this year and I am here to help you, your family and your friends. Please refer anybody to me that may be suffering financial distress.
I look forward to hearing from you soon to discuss your options for 2009.
*Mortgage interest rates are subject to change and applications are subject to meeting lenders application criteria and subsequent approval
** All investments are subject to receiving a copy of my Investment Disclosure which is available free of charge from my website or office.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
