TAL confirms scale of direct life/risk sales
Big insurer TAL has revealed the scale of its direct life/risk sales and the limited nature of the underwriting applied to such policies.
Answering questions on notice from the Parliamentary Joint Committee on Corporations and Financial Services, TAL revealed that between April 2016 and March 2017 the company wrote 42,202 new direct policies, most of them relating to life insurance.
It said that of the 42,202 policies written, 12,048 (29 per cent) were for funeral insurance products and that with respect to life insurance cover and income protection policies, 30,154 policies were issued which accounted for 71 per cent of new policies issued.
It said that around 8,140 (27 per cent) of the new policies were issued to customers with limited underwriting.
Explaining the nature of limited underwriting to the committee, the insurance company said TAL provided underwritten products and limited underwritten products via its direct channel with the limited underwritten products being made available for customers who did not want to provide personal information or answer any medical questions in the underwriting process.
“These products are not underwritten in the traditional sense, and to provide a comparable term of cover as underwritten products, an exclusion period on all pre-existing medical conditions is applied for the first five years of cover,” TAL said.
“This means that an insured is unable to claim for a condition they already have (including those for which they had symptoms) at the time of taking out the policy. However, they are fully covered for all other illnesses and injuries. If an insured can show they have been continuously free of the pre-existing condition in the five years immediately following commencement of the policy, they will be covered for any subsequent claim related to that condition.
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