The winter season has settles and as our frenetic social lives slow down just a little, it might just be the ideal time for your life clients to think a little more about the impact of their lifestyle on their health, and to be more mindful of nutrition and exercise – all year round.
The simple truth is that overindulgence today can have severe repercussions tomorrow. How many of us realise that an extra glass of wine here and a sugar binge there can have dramatic, longer-term health effects? And how many of your clients realise that bad eating habits can negatively impact their life cover, in the form of higher premiums and policy exclusions?
“Life is perfectly imperfect and is most certainly for living, but there is no doubt that aspects of one’s lifestyle can cost one in the long run,” says Hayley Taylor, Head of Underwriting at Hollard Life.
Pointing to the 155% increase in prevalence of Type 2 diabetes in the past six years in South Africa (according to the International Diabetes Federation), Taylor emphasises the fact that a healthier lifestyle can trim the cost of life and disability insurance cover, without requiring your clients to develop the physique and constitution of a modern-day Superman.
“What people don’t realise is that it’s not necessarily a life-changing event that leads to a health crisis,” explains Taylor. “Sometimes, gradual lifestyle changes and poor habits can lead to life-changing health conditions with long-term implications. While your clients should absolutely live life to the fullest, it is important to keep their eyes open at the same time, maintaining a good level of health and wellness while it is still within their control.”
Explain how insurers deal with existing health conditions
Of course, there are situations when your clients have less control over health conditions – conditions such as diabetes, hypertension, cancer, HIV, heart disease or even depression may all reach a stage where they can no longer be managed through lifestyle adjustments.
While this may mean that their insurance is a little more complex or expensive than the average Joe’s, it fortunately shouldn’t stop them from getting cover at all. However, they need to understand that their insurer, using loadings and exclusions, can address even the most challenging health or lifestyle issues – but not without affecting their pocket.
Explain to them that a loading is an additional cost applied to their premium when a life insurer believes that their state of health makes them statistically more likely to claim than the average person (and that such loadings may also be applied to recognise unusually dangerous hobbies or working environments).
In such cases, they may still get all the cover they require, but they will pay more for it.
Similarly, explain that an exclusion is applied to their policy if an insurer determines that the risk of their submitting a claim related to a medical condition is too great (like loadings, exclusions can also be used for dangerous hobbies or risky occupations). In a case like this, an insurer would provide them with cover with no additional cost, but won’t pay a claim related to that specific condition, hobby or occupation.
Exclusions can be permanent or for a specific period of time, and insurers are required to inform policyholders upfront of any such exclusion.
“Your clients may not see it this way initially when faced with a loading or exclusion, but when they consider all of the potential reasons why they might claim, it’s worth having a conversation with you before they decide it's not worth it. Choosing to be without ANY cover when it is available to them could put them and their family’s financial future at stake,” adds Taylor.
“It really is a matter of looking at life as being a glass half full. They should live life to the max, but manage their health, enjoy their wellness and make sure that their future is protected to the best extent possible. Sometimes counting the calories in that extra slab of chocolate gives them an opportunity to enjoy the good times, while getting the balance right.”