All life companies to offer COVID-19 hardship relief

In a statement released on Tuesday, Synchron director Don Trapnell said that following the group’s campaign to get life insurers to “step up” and ensure the viability of the industry in the face of the coronavirus crisis, every insurer approached by Synchron had agreed to put measures in place to protect policyholders and ensure they could retain their cover despite financial hardship.

“The coronavirus does not necessarily have to mean the end of our industry but it could if we don’t take action now,” Mr Trapnell said in a video address sent to life company chief executives.

“When COVID-19 is over, do you still want to have an industry that is full of customers or do you want to have an industry that has been denuded of clients, that is being denuded of advisers because they can't handle the write-backs? Then you need to take action now”.

ifa had supported Mr Trapnell’s campaign through an opinion piece published in late March, outlining options for insurers to consider to ensure clients were able to keep their cover in place, including the introduction of non-forfeiture provisions or temporary suspension of cover.

A matrix released by Synchron has outlined life companies’ policy responses to the campaign, including:

1. AIA - Potential for a two-month premium waiver with full cover; premium suspension for three months with no medical evidence needed for reinstatement. If the client is still suffering financial hardship after three months, sympathetic consideration would be granted to extending the premium and cover suspension for a further three months.

2. BT Life - Requests for relief will be considered on a case‐by‐case basis for policyholders. Relief includes but is not limited to short-term premium waivers. Advisers should refer all cases for support via their BDM. BT Life Insurance also has a premium holiday option where a policy may be suspended for up to 12 months for hardship.

3. MetLife - Premium is suspended but cover continues for three months. If still unemployed after three months, premiums is suspended for a further three months with no cover. Automatic reinstatement is available after six months without medical evidence.

4. MLC Life Insurance - Currently finalising details of a policy pause for customers, and expects this to be available by late May 2020. One-month premium waiver based on individual assessment. Client remains on risk during this period. Premiums recommence at the conclusion of the waiver period.

5. OnePath - Premium and cover suspension is available for a minimum period of three months and maximum of six months for clients that have held their policy 24 months or more. Cover bounce back is also available allowing clients to reduce sums insured and then reinstate without a reassessment of their health or financial circumstances.

6. TAL - Provided policy is in force for six months or more, client can suspend cover and premium while involuntary unemployed. Full reinstatement without health evidence provided this occurs prior to 30 September 2020. If client dies during the period of suspension due to COVID‐19, sum insured will be paid up to a maximum of $750,000.

7. Zurich - Premium and cover holds are available for clients, including those with policies in force for less than 12 months providing it was in force prior to 11 March 2020. Zurich also has flexible cover options allowing temporary reduction and then reinstatement of sums insured without assessment of health and financial circumstances within 12 months.

8. ClearView - Provided policy is in force for at least 12 months: If client is not self-employed, waiver of premium while involuntarily unemployed for up to three months. Cover remains in force and no health evidence needed for reinstatement. Client may also suspend premiums and cover for up to 12 months without reason. Reinstatement without evidence of health.

9. Integrity Life - If policy less than 12 months in force, one-month premium waiver. Over 12 months, three-month premium waiver. Full cover during waiver period. Plus, if policy is over 12 months, six-month premium and cover suspension are available. If policy is over 12 months, 12-month premium and cover suspension are available. No fresh underwriting on reinstatement.

10. Neos - If policy is in force for 12 months and client is not self-employed up to three-month premium waiver with cover is remaining in force. Alternatively, for provided policy in force for 12 months or more, client can apply for premium and cover suspension for up to 12 months. Reinstatement without evidence of health.

11. PPS Mutual - Suspend premium but retain cover initially for three months. After initial three months, suspend cover and premium for up to further three-month periods up to a total of 12 months. Reinstatement without medical evidence if reinstated at the end of one of the three-month periods.

Mr Trapnell said he was pleased to have received headline responses from every life company Synchron approached. 

“I am also heartened by the fact that while some are more generous than others, and all indicated that the circumstances of each case will be considered on its merits, each life office appears to be viewing policyholders sympathetically,” he said.