Individuals spent an astonishing $29.5 billion on health-related expenses in 2015-16, according to Zurich’s newly-released Cost of Care “bible”, and helping clients better understand the financial risk and prevalence of illness and injury could lead to better advice on life insurance.
The extensive research whitepaper by Zurich sought to fill the “missing link” in advising on life insurance, with the insurer believing that if clients had more awareness of the cost of care they would better understand why they should pay premiums each year.
“Insurance professionals struggle to articulate conversations around cost and prevalence … [but] they need to do this to shift from interest to engagement from clients,” Zurich risk strategy specialist and a contributor to the report, Danielle Visser, said at its launch.
The Cost of Care program covered 67 conditions across 10 different body systems, creating what Visser labelled “a bit of a bible for advisers”. The cost of each illness or injury was clearly laid out, with an additional calculator tool being available to advisers allowing them to match cost and risk with clients’ age.
It reported, for example, that one in three Australian men and one in four Australian women would be diagnosed with cancer by the age of 75. Over 128,000 cardiac angiograms were performed in Australia every year, with the average cost being $13,247. And individuals would pick up most of the cost of these medical issues, being the third-largest contributors to health spending after governments, spending nearly double that of health insurance funds.
Visser believed that helping clients better understand these sorts of figures would help advisers convey the worth of life insurance to hem.
She said that advisers needed to reshape misguided perceptions regarding healthcare, such as that illness risk is low and healthcare is free. They should then make sure interested clients comprehend their potential loss due to illness, before getting commitment by instilling value in what the client is paying each month.