AIA New Zealand Underwriting Philosophy

Transcription

1 AIA New Zealand Underwriting Philosophy The AIA New Zealand underwriting practice reflects a core philosophy that focuses on the needs of our producers and their clients. We have a team of well trained medical and underwriting professionals who are careful and disciplined and who possess the creative flexibility necessary to meet the needs of a changing market place. Our key principles on risk assessment are: To provide prudent underwriting decisions and aim to make a competitive offer without compromising the underwriting standards or the underwriting profession; To assess the application, where possible, on the information provided by the client (subject to Medical and Financial Underwriting limits); To request all requirements needed at first opportunity. 1

2 Medical Requirements Lump Sum Medical Limits Ages Non-medical Code B Code C Code D ,000,000 2,000,001 2,500,000 2,500,001 4,000,000 4,000, ,000,000 1,000,001 2,500,000 2,500,001 4,000,000 4,000, , ,001 2,000,000 2,000,001 4,000,000 4,000, , , , ,001 2,500,000 2,500, ,000 50, , ,001 2,500,000 2,500,001 + Trauma Cover (for $1,000,001 to $2,000,000) Age Now Female Male 0 50 Code C Breast examination* *If breast examination was done within the last 6 months or a mammogram we will require confirmation of normal examination and/or copy of mammogram report. ESR MSU 51 & over Same as above plus Exercise ECG Code C PSA blood test ESR MSU Same as above plus Exercise ECG Standalone Trauma Cover or TPD benefits are treated as additional benefits in calculating total sum at risk. 2

3 Medical Codes Code B GP Medical Examination HIV Hepatitis B & C Serology Fasting lipid group Fasting Blood Sugar Liver Group For males aged 66 and above a Prostate Specific Antigen test is also required Code C Specialist physician medical examination HIV Hepatitis B & C Serology Fasting lipid group Fasting Blood Sugar Liver Group Full Blood count Creatinine and Uric acid Resting ECG PMAR from usual GP For males aged 46 and above a Prostate Specific Antigen test is also required Code D Code E A code E is required when the Life Assured exceeds AIA New Zealand s standard height and weight guidelines Same as for Code C plus; Exercise ECG Chest x-ray (for sums exceeding $10,000,000) Microscopic urinalysis (for sums exceeding $4,000,000) For males aged 46 and above a Prostate Specific Antigen test is also required For males with Life Cover >$10,000,000 a PSA test is required For females with Life Cover >$10,000,000 a Breast Examination or results of current Mammogram within last 6 months is required GP medical Examination or Paramedical Fasting lipid group Fasting blood sugar Liver group Fasting blood test means that your client must not have anything to eat or drink (except water) for at least 10 to 12 hours before the test. 3

4 Financial Requirements Personal Cover Total Sum Assured Financial Requirements $2,000,001 - $3,000,000 Personal Lifestyle Check AIA New Zealand Financial Questionnaire Adviser needs analysis* $3,000,001+ As above, countersigned by the client s solicitor or accountant Business Cover Total Sum Assured Financial Requirements $1,500,000 - $2,000,000 Business Lifestyle Check - signed by all directors AIA New Zealand Business Cover Financial Report - signed by all directors $2,000,001 $5,000,000 Business Lifestyle Check - signed by all directors and accountant AIA New Zealand Business Cover Financial Report signed by all directors and countersigned by the client s solicitor or accountant & full accounts $5,000,001 + Business Lifestyle Check & full accounts & copies of loan agreement (where applicable) signed by all directors and accountant AIA New Zealand Business Cover Financial Report signed by all directors and accountant & full accounts & copies of loan agreement (where applicable) * must collect the same information as the AIA New Zealand Financial Questionnaire and includes total industry cover - not just cover with AIA New Zealand - as per normal financial underwriting rules 4

5 Income Protection, Mortgage Repayment Cover, Vital Income Protection and New to Business Cover Medical and Financial Underwriting Requirements Monthly Benefit * Medical Financial Less than $6000 NIL Nil $6,001 - $8,000 PMAR Nil $8,001 - $10,000 PMAR +Code B Blood tests only Proof of income for employees & accounts for $10,001 and over Code B PMAR self employed (see below) Proof of Income for employees & accounts for self employed (see below) Proof of Income Proof of income is required in all applications for Agreed Value and where Indemnity Value income protection applications exceed $8000 per month. * 100% of the Income Protection, Vital Income Protection, Mortgage Repayment Cover and New to Business Cover are to be added together. 5

6 Underwriting Guidelines New to Business Cover: 1) New to business or self employed for less than four years. 2) Benefit amount should be equal to a realistic level relative to the occupation. 3) Must be owned by the business 4) Monthly benefit available, $2000, $3000, $4000, $6000 and $ ) Available to occupations 1-4 6) No off-sets 7) Only available on a two-year benefit period. a. If the Life Assured returns to work for more than 12 months then the only way they can receive further benefits for the same or a related condition is if all of the following are met: i. They must have ceased to be either Totally or Partially disabled, e.g. they have recovered from their disability ii. They must have been able to perform all of their pre-disability duties for at least 12 consecutive months iii. They must have been able to work the same number of hours they did prior to their disability 8) Wait periods 4, 8 and 13 weeks 9) Conversion option at end of two-year period to Indemnity Value Income Protection with a two-year benefit period, with the same sum assured and wait period. 6

7 Business Continuation Cover Medical and Financial Underwriting Requirements Monthly Benefit Medical Financial Less than $6000 Nil AIA New Zealand application form $ $8000 PMAR AIA New Zealand application form $ $10,000 PMAR + Code B Blood tests only AIA New Zealand application form and one of the following: Business Lifestyle Check - signed by all directors AIA New Zealand Business Cover Financial Report signed by all directors $10,001 - $20,000 Code B + PMAR AIA New Zealand application form and one of the following: Business Lifestyle Check - signed by all directors AIA New Zealand Business Cover Financial Report signed by all directors $20,001 - $30,000 Code B + PMAR AIA New Zealand application form and one of the following: Business Lifestyle Check - signed by all directors and accountant AIA New Zealand Business Cover Financial Report signed by all directors and accountant $30,000 + Code B + PMAR AIA New Zealand application form and one of the following: Business Lifestyle Check - signed by all directors and accountant & full financial statements for the past two years AIA New Zealand Business Cover Financial Report signed by all directors and accountant & full financial statements for the past two years Note where the businesses last years accounts or two out of the last three years accounts show a net loss, then the applicant will need to provide a full set of financial statements for the past two years. This cover is designed to provide protection to those businesses which have a reasonable history of profitability and not those which are experiencing a sustained downturn. 100% of the Income Protection, Vital Income Protection and Business Continuation Cover are to be added together. Version number AIANB or above the version code can be found on the front left cover of the application form. 7

8 Business Continuation Cover 1. This benefit is to provide protection to an established and profitable business in the event of a key person being disabled. The key person is either a working shareholder or a non-shareholder employee with specific skills. A key person must generate revenue by their own exertion for the business. 1a. Calculating the sum assured. Gross Profit (less cost of goods sold) x % of revenue generated by key person, divided by 12 = Monthly Benefit Financial Underwriting Calculation Example Gross Annual Turnover (less cost of goods sold) % of revenue generated by key person Monthly Benefit $600,000 $1,200,000 $300,000 $600,000 50% 20% 70% 100% $25,000 $20,000 $17,500 $50, The business must have no more than five key people. 3. The business must have no more than 15 employees. 4. Where the businesses last years accounts or two out of the last three years accounts show a net loss, then the applicant will need to provide a full set of financial statements for the past two years. Business Continuation Cover is designed to provide protection to those businesses which have a reasonable history of profitability and not those which are experiencing a sustained downturn. 5. This is an agreed value cover. To maintain the contract on an agreed value basis, updated financial evidence must be provided to AIA by the policy owner at least once every two years, within 90 days of the policy anniversary commencing on the 2 nd policy anniversary, to substantiate the existing level of cover. If updated financials are not provided, the cover will automatically revert to an Indemnity basis at time of claim. 6. Maximum benefit $50,000 pm. Max benefit period is 1 year only. a. If the life assured returns to work for more than 12 months then the only way they can receive further benefits for the same or a related condition is if all of the following are met: i. They must have ceased to be either Totally or Partially disabled, e.g. they have recovered from their disability ii. They must have been able to perform all of their pre-disability duties for at least 12 consecutive months iii. They must have been able to work the same number of hours they did prior to their disability 7. Optional Partial disability benefit 8. Wait periods 4, 8, 13 weeks 9. Benefit must be owned by the business 10. No offsets 8

9 Farmers Revenue Protection Medical and Financial Underwriting Requirements Monthly Benefit Medical Financial Up to $5,000 (Agreed) Nil AIA New Zealand application form version AIANB or above $5,001 - $6,000 (Agreed) Nil AIA New Zealand application form version AIANB or above AND Full financial accounts for the past 3 years $6,001 - $8,000 (Agreed) PMAR AIA New Zealand application form version AIANB or above AND Full financial accounts for the past 3 years $8,001 - $10,000 (Agreed) PMAR + Code B Blood tests only $5,001 - $6,000 (combined $5,000 Agreed & up to $1,000 Indemnity) $6,001 - $8,000 (combined $5,000 Agreed & up to $3,000 Indemnity) $8,001 - $10,000 (combined $5,000 Agreed & up to $5,000 Indemnity) Nil PMAR PMAR + Code B Blood tests only AIA New Zealand application form version AIANB or above AND Full financial accounts for the past 3 years AIA New Zealand application form version AIANB or above AIA New Zealand application form version AIANB or above AIA New Zealand application form version AIANB or above AND Full financial accounts for the past 3 years Calculation of the monthly benefit: 30% x gross turnover = annual sum assured /12 = monthly benefit 30% x $175,000 = $52,500/12 = $ 4,375pm Please note where the Agreed Value monthly benefit exceeds $5,000 full financial accounts for the past three years will be required irrespective of the amount of the Indemnity monthly benefit. 9

10 Farmers Revenue Protection 1. Must be a primary producer, eg. dairy, sharemilkers, sheep, beef, mixed farming (beef/sheep or mixed cropping eg. wheat/sheep orchardists, fish, viticulturists and farm managers). New types of primary producers, eg. cut flowers to overseas markets are included. 2. Farming duties must be accepted at occupation 3. Duties that are related to occupation 4 will not be accepted. 3. Benefit amount is based on 30% of gross turnover to a maximum of $10,000 per month. The first $5000 will be on an agreed value contract. Additional cover above $5,000 will be based on our usual medical and financial requirements for the total monthly benefit. 4. If the primary producer has been in business for less than one year, the benefit will be based on replacement of primary producer at a maximum of $48,000 per annum. 5. Benefit may be split between husband and wife, who are both primary producers. The Farmers Revenue Protection will be based on 30% of turnover to a maximum of $10,000 combined total for both primary producers. 6. Ages Wait periods 4, 8 13 weeks. 8. Only available with a benefit period 2 years. 9. No offsets 10. Agreed value benefit to a maximum of $5,000 per month with no financials. 11. Benefit from $5001 to a maximum of $10,000 per month. This may be on an agreed value or indemnity value basis. 12. An extended wait period of 52 weeks will apply to existing Income protection covers held with AIA or any Income Protection applied for in conjunction with Farmers Revenue Protection. 13. Where an applicant for Farmers Revenue Protection has existing IP cover with AIA or another company and the wait period is less than 52 weeks, the Farmers Revenue Protection may be offered with an endorsement as follows: Our offer is subject to existing company name IP cover having a 52 week wait. Benefits under existing company name IP will be offset for the first 12 months of any claim. 14. Benefit calculation is based on 30% of turnover. Calculation of the sum assured: 30% x gross turnover = annual sum assured /12 = monthly benefit. Examples: 30% x $300,000 = $90,000/12 = $7,500 monthly benefit. 30% x $400,000 = $120,000/12 = $10,000 monthly benefit 10

11 Income Protection, Mortgage Repayment, Vital Income Protection, Business Continuation Cover, New to Business Cover and Farmers Revenue Protection Calculating total sum at risk for financial requirements 100% of the Income Protection, Mortgage Repayment, Vital Income Protection, Business Continuation Cover, New to Business Cover and Farmers Revenue Protection are to be added together. Calculating total sum at risk for medical requirements When Business Continuation Cover, or Farmers Revenue Protection is equal to or less than Income Protection Amount and/or Vital Income Protection and/or Mortgage Repayment, add 25% Business Continuation Cover to calculate the total risk amount.. Add 100% of New to Business Cover and/or Vital Income Protection and/or Mortgage Repayment to calculate the total risk amount. Examples (a) Income Protection $35,000 (b) Income Protection $35,000 Mortgage Repayment $15,000 Mortgage Repayment $15,000 Business Continuation Cover $40,000 (x25%) New to Business $24,000 ($2000 monthly) Total Risk $60,000 Total Risk $74,000 (c) Business Continuation Cover $40,000 (d) Income Protection $50,000 Vital Income Protection $25,000 Vital Income Protection $20,000 Mortgage Repayment $15,000 Mortgage Repayment $10,000 Total Risk $80,000 Business Continuation Cover $40,000 (x25%) Total Risk $90,000 (e) Income Protection $25,000 (f) Vital Income Protection $35,000 Mortgage Repayment $15,000 Mortgage Repayment $15,000 Farmers Revenue Protection $40,000 (x25%) Farmers Revenue Protection $40,000 (x25%) Total Risk $50,000 Total Risk $60,000 11

12 When Business Continuation Cover or Farmers Revenue Protection Cover is greater than Income Protection Amount and/or Vital Income Protection and/or Mortgage Protection), add 50% Business Continuation Cover or Farmers Revenue Protection Cover to calculate the total risk amount 100% of New to Business Cover and/or Vital Income Protection and/or Mortgage Repayment and/or Income Protection are to be added together. Examples (a) Income Protection $35,000 (b) Income Protection $20,000 Mortgage Repayment $15,000 Mortgage Repayment $10,000 Business Continuation Cover $60,000 (x50%) Vital Income Protection $20,000 Total Risk $80,000 Business Continuation Cover $60,000 (x50%) Total Risk $80,000 (c) Income Protection $35,000 (d) Income Protection $35,000 Mortgage Repayment $15,000 Mortgage Repayment $15,000 New to Business $36,000 ($3,000 monthly) Farmers Revenue Protection $80,000 (x50%) Total Risk $86,000 Total Risk $90,000 (e) Vital Income Protection $10,000 Income Protection $20,000 Mortgage Repayment $10,000 Farmers Revenue Protection $60,000 (x50%) Total Risk $70,000 12

13 Superior Health Cover Medical and Financial Underwriting Requirements Age up to 59 Age 60 to 64 Age 65 and over n/a PMAR Individual Consideration - please contact the underwriter 13

14 AIA New Zealand - Guidelines for Completing Applications APPLICATION FM 1. Please ensure that you write your Agency Name, IFA Name, IFA Number and your FSP number on the top of page 1 of the application form for commission payments. If you are sharing the commission with another IFA, please show the percentage (%) commission split. 2. Please ensure that all relevant questions and sections are answered correctly and all relevant details (e.g. Date of Birth, address details) are provided on the application form to avoid unnecessary delays in the processing of your applications. 3. Please provide the married woman's Maiden Name as this makes it easier to trace past medical records. 4. Please ensure that any special instructions to New Business and/or Underwriting are provided clearly on the application. ILLUSTRATION 1. Please enclose a copy of the illustration with the AIA New Zealand Application. 2. Please check to ensure that all the details on the quote (e.g. applicant's age, amount of cover required, benefit options) are correct. 3. If there is any doubt over the Occupation Class or Loadings, we suggest you use the search function on the illustration software or contact our underwriters on Call Free PERSONAL STATEMENT To enable your submitted applications to be processed quickly, please ensure that all relevant sections of the Personal Statement are completed. Please provide the Doctor's / Specialist's full name, address and phone number on the Personal Statement. (If the applicant's medical records are held by a different Doctor / Specialist, please provide their full name, address and phone number.) PMAR's are requested by the Underwriters. In most cases this is done electronically with automated follow ups. If fasting blood tests are required by the Underwriters, please advise your client not to eat or drink for 12 hours prior to the tests. DISCLOSURE - If a medical condition or hazardous pursuit is disclosed, please obtain as much information as possible. Please check that the Life Assured has signed and dated the Declaration. If you are submitting an AIA New Zealand Business Cover Professional application, please enclose a completed Business Lifestyle Check or AIA New Zealand Business Cover Financial Report. 14