Life Insurance Roundup, March 7, 2016

ASIC to investigate CBA’s life insurance arm |

The Australian Securities and Investments Commission will investigate allegations that the Commonwealth Bank’s life insurance arm is denying heart attack claims by deliberately using an outdated definition buried in the policy.

The allegations were revealed in a joint media investigation by Fairfax Media and Four Corners, which exposed unethical conduct in one of the country’s biggest life insurers, which has more than 4 million policyholders and collects $2.5 billion in premiums every year. 

Ask Ken: Take a closer look at life insurance

Question: My husband and I met with a financial adviser to discuss our retirement plans. He said we were spending too much on whole life insurance and suggested getting term and put the difference into our retirement plan. He also suggested we cancel the life insurance we have on our children because they don’t need it. Do you think this is good advice? 

Readers’ Corner: Life Insurance | Business Standard Mobile Website

Which plan should I invest in for my granddaughter, so that money is available when she starts her college education? She is now five years old. 

Thai Life Insurance buoyed by study results – The Nation

Company president Chai Chaiyawan said Intage (Thailand) had conducted a study on Thai Life’s image through both qualitative and quantitative research involving 4,000 consumers, 1,000 in Bangkok and the rest upcountry. Of the total, 1,500 respondents held life-insurance policies, 500 did not, and 2,000 were a random sample.

The research found that consumers had good feelings about the Thai Life brand. The satisfaction index was 2.2, higher than the average of 1.94 for the overall life-insurance industry. 

ANZ wealth restructure raises eyebrows |

Observers of the financial services industry have been expecting for a while that Australian banks would start to scale back their wealth divisions, if not kill them off altogether.

Even so, a note by Citi analyst Craig Williams to clients in the middle of last year was particularly prescient. In that note, he predicted that the banks – faced with lacklustre earnings growth, low returns on equity and the explosion of do-it-yourself investors who are disinclined to seek advice from their mortgage provider – would look to sell all or parts of their wealth businesses.

And so it has come to pass. In October last year National Australia Bank agreed to sell 80 per cent of its life insurance arm to Japan’s Nippon Life Insurance Co. for $2.4 billion. 

Life/risk code of practice slated for July | Money Management

The Financial Services Council (FSC) has declared a Code of Practice between life insurers and consumers will be implemented in July as it has sought to describe changes to the life/risk sector as a work in progress.

FSC chief executive, Sally Loane on Sunday went to the trouble of issue issuing a formal statement pointing out the important role of the Australian life insurance industry and the fact that it had paid out approximately $5 billion in claims across trauma, total and permanent disability, income protection and life insurance in 2014, taking the total amount paid out in claims in the past eight years to $27 billion. 

Price hikes threaten to make long-term care insurance unaffordable for thousands | TribLIVE

Regis Niederberger and his wife bought long-term care insurance policies more than 15 years ago because they watched sky-high costs of nursing homes drain the savings of some older relatives who didn’t have the coverage.

Now Niederberger, 71, of South Fayette thinks insurance companies are taking advantage of his foresight as they try to push through huge rate hikes that threaten to make policies unaffordable for tens of thousands of Pennsylvanians.

“I think it stinks,” said Niederberger, who purchased his policies from Genworth Life Insurance Co., the nation’s largest long-term care insurer, and has dealt with two previous rate hikes.

Genworth is seeking rate increases between 33 percent and 130 percent, depending on the policy. The increases could affect 27,500 policyholders in the state, according to the state Department of Insurance. 

Zurich Australia to acquire Macquarie Life – InvestorDaily

Macquarie is the second top-tier Australian bank to exit the life insurance business in the space of five months, with NAB/MLC offloading its life division to Japanese life insurer Nippon Life in October 2015.

Zurich’s acquisition of Macquarie Life is subject to regulatory and court approvals and is likely to be finalised in the second half of the 2016 calendar year.

Macquarie Life’s Australian based staff will be integrated into Zurich as part of the acquisition, according to a statement by Macquarie.

The head of Macquarie’s Banking and Financial Services Group, Greg Ward, said the sale of the business “reflects the need for significant scale in the capital intensive life insurance industry in order to drive appropriate returns”.

“Zurich’s expertise, global reach and customer focus mean they are ideally positioned to continue providing high quality insurance products and services to Macquarie Life customers,” Mr Ward said. 

Annuity ‘income’ isn’t magic — most of it is your own money |

In a recent column you wrote, “You would need to invest $600,000 to have a life annuity of $40,000.” I’m almost 67 and have about $500,000 in investments with a broker. I receive Social Security of $2,100 a month. I have about $50,000 equity in my house. How could I get an annual income on those investments that would approach $30,000 to $35,000?


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