Australians generally purchase life insurance through advisers (retail advised products) or have obtained life insurance through superannuation (group). While some Australians also purchase life insurance directly, the combination of these distribution channels may not be sufficient to meet the needs of everyone.
Historically, life insurers have partnered with organisations such as banks, general insurers and health insurers to expand the reach of Australians thinking about their life insurance needs, but further work is required.
Please consider what organisations life insurers could partner with (e.g. other financial or wellness institutions) to increase accessibility of life insurance to a broader range of Australians (in particular, those aged younger than 40) at a reasonable cost (i.e. lower costs to provide insurance increases the amount that is returned to customers as claims/benefits).
For one example potential partner, outline key considerations for the various aspects of the offering that might need to be tailored to address the needs of those customers and manage any potential increased risks.
Some things to consider are:
- Product design. What products may be most effective for this age group? Products sold by life insurance companies today generally include:
- Life cover: pays a lump sum benefit if the life insured dies.
- Total and permanent disability (TPD): provides a benefit if the life insured becomes totally and permanently disabled.
- Critical illness: provides a lump sum benefit if the life insured suffers a specified critical illness.
- Income protection: provides a monthly benefit if the insured can’t work due to illness or injury.
- How the product would be administered/distributed. Provide reasons why the suggested approach would be considered effective.
- Underwriting – e.g. types of questions asked to appropriately price the risks being written. Give examples.
- Pricing – given the customer segment what factors would you consider in pricing the product?
