An insurance adviser’s perspective.
Today MPs cast their final vote at the third reading of the End of Life Choice Bill – aka ‘The Euthanasia Bill’. They voted 69 in favour to 51 against, meaning there will now be a referendum as part of next year’s general election.
This Bill has been gyrating around parliament for over two years. It has had a lot of press, and has been the source of much comment, and has generated over 35,000 submissions – the most ever received by a select committee. This is probably because it presents some challenging and complex issues
But life insurance is not one of them.
A stuff article by Katarina Williams says “Life insurance companies are wrestling with the question whether they will pay out or not if assisted dying becomes legal”.
I doubt that very much.
David Seymour, the Bill’s sponsor, is quoted saying “…Accessing assisted dying should not affect life insurance policies”. Well thank you, Mr Seymour, for taking such a strong and popular position on the side of doing … what is already being done. He goes on “If any company want to be the first to refuse a terminally ill policy holder their payout because they choose a compassionate death, I’ll be happy to offer them some free PR advice.”
Fair to say his advice, if called on, would be priced appropriately.
Back to this “complex and challenging” issue that insurers are supposedly “wrestling” with. The vast majority of terminally ill people who would make a choice about assisted dying will be elderly. Most do not have life insurance at that age. They will have out-lived either the need, the affordability, or the expiry age of their policies. Yet in the debate around euthanasia the focus often lands on extreme examples of much younger subjects, with rare cases of severe illness. These are often long-running, pre-existing, or congenital conditions. Tragically, some of these younger people won’t have life insurance because they could never buy it, or worse they hadn’t got around to it yet.
So the number of cases where people who have purchased a policy, and subsequently become terminally ill, is going to be relatively small.
Notwithstanding the low incidence; what is the typical insurance policy response? In the market today all the main insurers have life policies with two major exclusions: criminal act, and suicide in the first 13 months. That’s it. In other words, “assisted dying” is not excluded. Murder of the insured by a policy beneficiary is. But is assisted dying that? No, and insurers have not signalled an intention to change their policies.
There is no issue for insurers to “wrestle” with and no need at all for Mr Seymour’s “advice”.
But here’s the most important point: most (including all of my clients) who have insurance in place and find themselves dealing with a terminal condition, will meet the criteria for an early payment (‘terminal illness benefit’) and will therefore have the option of being paid out before they even face the choice about assisted dying.
To answer the Stuff headline: Will terminally ill life insurance policyholders be covered if they ask for help to die?
I have paid well over $1,000,000 in terminal illness claim to several clients in the last year. At a time when a family is under intense emotional, physical and financial strain these payments gave some assurance and comfort to the insured and their family.
However you feel about the referendum, whatever your thoughts on it, this article and the subject it attempts to broach is not a helpful contribution to the debate. The theory it supports undermines the real benefits of life insurance and promotes an incorrect perception about the industry. It is an insult to those of us who make it our business to be there for the insured and their families.