FSC524 Life, Disability & Health Insurance: A Detailed Case Study

This case study provides an in-depth analysis of life, disability, and health insurance products, benefits, risks, and limitations, focusing on the scenario of Donna and Greg. It includes a risk assessment, identifying personal risks faced by Donna and Greg, and explores alternative risk management methods covered by private health insurance. The study recommends suitable life and disability insurance products, compares coverage options, and suggests add-on benefits. Furthermore, it discusses choosing a provider, policy ownership, affordability, policy review processes, and claims procedures. The analysis considers environmental, procedural, technical, and risk management factors relevant to life, disability, and health insurance, providing a comprehensive evaluation of insurance solutions for individual needs.

FSC524 Life, Disability and Health
Insurance

Table of Content
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1: Risk Assessment...............................................................................................................1
Identification and evaluation of personal risks faced by Donna and Gregface 100....................1
Identification of alternative ways of managing risk that would covered by private health
insurances and discussion on implications of following a non-insurance strategy in terms of
their risk tolerance and risk capacity ..........................................................................................2
TASK 2: Recommending suitable life and disability insurance products.......................................2
TASK 3: Comparing cover and recommending suitable add-on benefits.......................................3
TASK 4: Choosing a provider.........................................................................................................5
TASK 5: Policy ownership..............................................................................................................5
TASK 6: Affordability.....................................................................................................................6
TASK 7: Policy review....................................................................................................................6
TASK 8: Claims...............................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Health Insurances are those insurances type which cover medical expenses that are
associated with illness or injuries. These medical expenses include hospitalisation costs, doctor
consultation charges and medicine cost. A health insurance cover medical coverage of pre-
hospitalisation charges, hospitalisation charges and post hospitalisation charges. Along with
expenses of ambulances and sum insurances, add-on covers, claims etc. are covered in health
insurances. Health insurances are of various kind according to type of coverage it provides,
which include individual insurances, family health insurances, senior citizen's health insurances,
hospital daily cash, mediclaims etc. Health insurances have multiple advantages in current
situation where people spend a major portion of their income over health related aspects. Health
insurance plan covers a range of surgeries and ailments. In addition to that, they also cover
medical treatment aspects (Arkorful and et. al., 2021). Health insurances are a contract in
between the insurer and policyholders, where policyholder pay a fixed premium to insurance
companies and in return the insurance company pay for the various medical expenses which it
mentions to cover in its protocols. The project includes evaluation of life suitability, disability
and health insurance products along with structures and options of benefits, risk, limitation and
non-insurance solutions in regards to a case study of Donna and Greg, who require personal
insurance needs. Further, the project applies environmental, procedural, technical and risk
management factors in context of life, disability and health insurances.
MAIN BODY
TASK 1: Risk Assessment
Identification and evaluation of personal risks faced by Donna and Gregface
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Accidental deaths and Disabilities: In this, accidental deaths are mainly caused by an unexpected
happenings and events. The severity level is too high in case of accidental deaths and disabilities
as well. On the other hand, its possibility is quite low but having high severity rates.
Any medical health issues which need hospitalisation: In this, the possibilities of a person having
any issue regarding their well-being is quite high along with its severity level as well.
Health check-ups, Maternities care: The antenatal care is generally a systemic supervision of
female during their pregnancy in order to monitor the procedure of the foetal improvement.
Having such possibilities are somewhat low along with its severity level.
Complication in health and Complexity in surgery: While talking about health complications as
well as surgical complexities, the possibilities are somewhat moderate to high and its severity
level is also low to moderate level.
Identification of alternative ways of managing risk that would covered by private health
insurances and discussion on implications of following a non-insurance strategy in terms
of their risk tolerance and risk capacity
If an individual is not having health insurances then the risk management can be done via
alternative methods, which include use of family health insurances. Family health insurance
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Accidental deaths
Disabilities
Any medical health
issues which need
hospitalisation.
Health check ups
Maternities care
Complication in
health.
Complexity in
surgery.

secure family's health and covers the entire family (Cheng, Hilpert, Lavasani and Schaefer,
2022). This can be an alternative for private health insurances as this provide cover for every
family member on a single premium. The risk tolerance of family health insurances is around
1,500 pounds which can be easy to weigh on per month basis for Donna and Greg. The risk
capacity for Donna and Greg are different, Donna have a greater risk capacity as she is not
having any dept. whereas, Greg is already having a dept., so his risk capacity will be lower. In
addition to this, if an individual generally arrives at healthcare with having life-threatening injury
or disorder, they are treated quickly under the recent public well-being system. Therefore, if they
do not need a quick care treatment, they are required to go via an assessment procedure as well
as generally have to qualify for an elective service within the public well-being system. Such
procedures can be effectively protracted, meaning it can be a month, or years as well, prior they
can receive a care treatment which a person can need.
TASK 2: Recommending suitable life and disability insurance products
Donna require life insurances which cover accidental death, whole life insurances are
such life insurances which can be beneficial for Donna as such life insurances provide death
benefit coverage to the nominee of person. As Donna wants her mother to be secured after her
death, the whole life insurance can help her with that. In addition to that, whole life insurances
contain a saving component in which the cash value accumulates in smaller amount (Rothstein,
2018). The whole life insurances cover hospitalisation expenses, which can be beneficial for
Donna in future. Donna's mother has recently being treated for breast cancer (Costa-Font and
Raut, 2021). Donna, if adds her mother in her health insurance, then her future medical expenses
can also cover in the life insurance premium. Whole life insurances also cover the permanent
disability benefits.
Greg is currently on a dept for his studies and wants to pay off the dept. His patents are
earning and good income but soon after their retirement they will rely on Greg. Measuring the
intensity and possibility of future perspective which can help Greg in dealing with the medical
emergency, Greg should go for term life insurance in which the life insurance is providing
benefits for a specific time period and can be further developed into whole life insurances after
the termination, on the demand of user. The term insurances provide life coverage up to a pre-
agreed time period. If the person die over this period then the policy pays total lump amount to
the dependents, in this scenario if something happens with Greg, his parents will be financially
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secure. Along with that, this life insurance will be beneficial looking at the current scenario of
Greg, where he is saving a less amount and have dept. to pay (Srbinoski, Poposki, Born and Van
Hulle, 2022). The term insurance will be a less burden for him and will also cover his
hospitalisation and any other medical expenses if that rises in during the period. After getting the
increment in pay, Greg can further change his life insurance policy from term life insurance to
whole life insurances.
In addition to this, they both can also use different life insurances like family income
benefit, where their family be getting monthly fixed amount after their premature or sudden
death.
TASK 3: Comparing cover and recommending suitable add-on benefits
a. The life insurance providers who offer these products are, AIA life insurance and
Asteron Life insurance. These life insurance providers, provide cover for death and terminal
illness along with waiver in premium and changes in policy if the person wants to change the
policy or life insurance kind in future (Kwadwo Tuffour and et. al., 2021). Life insurances
policies do not cover disabilities and hence additionally, if Donna and Greg wants to add
disability cover they can take these in addition. ASB, https://www.asb.co.nz/ provide insurance
for disabilities for keeping up with monthly expenditure of person after disability. Another one is
Life Simple, https://www.lifesimple.co.nz/ which provide disability cover for life insurances.
AIA life insurance, https://www.aia.co.nz/ provide life insurance covers, where premium
are paid either in monthly duration or annually from the start of policy date. The premium it
offers are guaranteed and are not changed unless the user make changes in policy. The cover can
be increased any time. The cover last until the full amount is paid or the policy is cancelled by
user or company ((Chin, M.H and et. al., 2018)). The cover includes sudden death and diagnosis
of terminal disease before the expiry of insurance, excluding the suicide. The joint life policy
cover for both the partners. The policy gives the amount in premature death of claimed one, to
their family after cutting the remaining duration's premium.
Asteron Life insurance, https://www.asteronlife.com.au/ policies, cover for life protection
which include death and terminal illness from the start of date of insurance. In addition, the
provider allows cover changes with certain limits, excluding the suicidal death. The death of
insured person is covered at every place of world. The difference between both, AIA life
insurance and Asteron Life insurance is that, former have term life insurance of minimum 10
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years while the later have minimum insurance term of 5 year. The policy of AIA life insurance
says that 65 years is the maximum age. Whereas, the Aestron policies can't last for more than 50
years.
Donna should go for whole life insurance from AIA life insurance. Whereas, Greg sould
go for term life insurances from Asteron Life insurance. AIA life insurance policies have
minimum term life insurance of 10 years (Birds, 2018). Greg is already having a burden of dept
over him, so a minimun duration of term plan will be sufficient for him, he can increase the term
life insurance plan later. Asteron Life insurance plan is suitable to Donna, as their policies are
similar to AIA life insurance in terms of covering but they cover upto the age of 65.
b. Disability coverages are not automatically included within the life insurances policy.
They are added within the policies at extra cost. An individual needs to purchase it, in during the
application filling process. The disability covers will be beneficial for Donna and Greg, for their
future perspectives. These disability add on covers will additionally cover for disabilities cases.
If in any case, they face disabilities that hinders their professional career and financial stabilities,
they can be financially assured and can bear their parents expenses as well. Disabilities cover, in
this scenario will be proved as beneficial for them. ASB offer both short and long term disability
insurances (Dahiya, Sharma and Grima, 2022). The long term policies start after the end of short
term policies, so the employees are not winded up in between the plans and get saved from the
income gaps. With return to work initiatives, ASB is helping employees to get their jobs back,
saving the cost and disrupt the productivity lost. The combined plans offer comprehensive
coverage which help the employees through disabilities.
TASK 4: Choosing a provider
Among the two disabilities life cover providers, ASB can be a suitable fit for Donna and
Greg, as it covers for long term, short term and individual disabilities coverage. The disability
life insurances of ASB provide add on benefits for long term and individual coverage, that is
benefits up to the retirement age and is most commonly used for critical diseases like cancer and
back disorder, excluding the injuries of back (Nicoletti, 2019). Greg, can go for short term
disability insurance of ASB. Whereas, Donna can go for long term disability insurances. In
addition, the cover of ASB covers critical diseases, which can be beneficial for Donna and Greg
as they have seen the financial burden of critical diseases like cancer.
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TASK 5: Policy ownership
The policy ownership involves owner of the life insured, the insured person and the
beneficiary. In whole life insurances, the policy is guaranteed to be active for the entire lifetime
or up to the date of maturity, on condition of paid premium. The insurance provider pays the
benefit on death as per the policy to beneficiaries, which can be the mother of Donna, in her
scenario (Bhat, 2020). The premiums of whole life insurances are higher as compared to term
life insurances, so Donna may not have any problems in paying premiums as she is not having
any dept and her income is sufficient to pay the premium and save the extra amounts.
The policies of term life insurances provide health coverage on a fixed premium rate for a
limited period of time. After the end of the period, the insured person is no longer guaranteed or
they can further obtain another coverage. Term life insurances have a comparatively low amount
of premiums as compared to that whole life insurances. This can be beneficial for Greg, as he is
currently having a burden of dept over him. He can change or increase his life insurance plan
after the increment in his salary and after he pays off all his bills (Boyer, De Donder, Fluet,
Leroux and Michaud, 2020). The beneficiaries get the death benefit of term life insurances. In
the scenario of Greg, his parents can get the death benefits in case of any misfortune and can
continue their life without any dependency on Greg.
TASK 6: Affordability
If Donna and Greg can't afford the private life insurance then there are several ways by
which the cost of life insurances can be reduced up to their criteria. To reduce the life insurance
cost of Donna, the additional covers of the policy can be removed which are not required by
Donna like maternity expenses, regular check-ups etc. Additionally, Donna can choose for
herself that weather she wants to pay the premium in monthly, quarterly or annually order.
Paying the premium amount annually will save her 5% on total cost (Choudhary, 2018).
To reduce the premium burden of Greg, high deductibles can be requested. With high
deductibles, cost can be lower. Increasing deductible cost from 200 dollars to 500 dollars can
reduce the collision as well as the comprehensive coverage costs by 15-30%. Another strategy
which can be used to help Greg with cost of life insurance premium is annual payment of
premium. The annual premium payment can reduce the premium costs.
TASK 7: Policy review
Donna and Greg can use their life insurance plan in three circumstances:
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1. Donna can use her life insurance policies during her maternity expenses.
2. Donna and Greg both can use their individual plans for any kind of surgery.
3. Beneficiary of Donna and Greg can use the death benefits in case of accidental death of
any one of them (ZULFIQAR and et. al., 2020).
They can claim their life insurance benefits by contacting the local agent of insurance company
or directly contacting the company. A few times, company ask for filling the form and give the
prove. After which, the privileges are granted.
TASK 8: Claims
a. Claim assessor is the professional person who is responsible for conducting the
investigations regarding insurance claims to assure the validity of claims. For claiming the life
insurance funds, Donna have to follow these steps: Filling up the form for claim, providing the
death certificate of Greg and medical reports of her self, providing the policy documents along
with police FIR and post mortem report of Greg, further process will be covered by claim
assessor and claim will be provided to Donna if all the documents proved to be correct and
compiled with the company's policies (Golinghorst and et. al., 2022).
b. Donna need to submit her following documents, to claim for her medical expenses
from AIA life insurance, which are: filling up the form, providing medical history reports,
signing the declaration form. Further, claim assessor will evaluate the form and assure the claim's
authenticity
https://www.aia.com.my/content/dam/my/en/docs/myaia_app/myaia_app_faqs_jan2020.pdf To
claims Greg's life insurance from Asteron Life insurance, Donna needs to call for the company's
claim. Asteron Life insurance will ask for documents like medical reports, Police FIR, death
certificate of Greg and post mortem certificate. The beneficiary needs to sign the consent form
after that https://www.asteronlife.co.nz/claims.html#claimLife
c. Claim assessor can't reject the claim, as per the Insurance Law Reform Act 1977. As
per which, any kind of insurance claims can't be declines because of any misstatement from
applicant which was not significantly incorrect. Another section of the act says that any life
policy is prohibited, for declining the claim because of age misstatement where insurance
company is being given the correct age for policy changes. Claim assessor will settle the claim as
there is no misleading or incorrect information.
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CONCLUSION
The overall report concludes that health life insurances are of great importance for
securing the future of individual alone as well as the family. The importance of life insurances
are described briefly with the case scenario of Donna and Greg. Donna's mother had breast
cancer a few years ago. Her mother is in now remission after chemotherapy and radiotherapy. If
Donna had covered health insurance plans a while ago, the treatment of her mother could have
cost in limited range for her. If Donna, now covers health insurance plan then her wish for
leaving funds for her mother on her premature death can be fulfilled. The health insurance plans
which covers accidental death, grants amount to the nominees in case of accidental death.
Whereas, in scenario of Greg, his parents are planning to rely on Greg after their retirement, so in
any kind of situation if Greg faces unpredictable medical issues, then they may not be able to
bear the cost of it. For such reasons Greg and Donna both should go for health insurance. The
health insurance plans and disabilities cover are shown beneficence with the context of Donna
and Greg, along with this the report conclude that if in any case the private health insurances are
creating financial burden, then additional non-insurance methods can be used for a limited time
period.
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REFERENCES
Books and Journals:
Arkorful, V.E. and et. al., 2021. Examining quality, value, satisfaction and trust dimensions: An
empirical lens to understand health insurance systems actual usage. Public
Organization Review, 21(3), pp.471-489.
Bajpai, S. and Mazhar, S.S., 2022. MARKETING STRATEGIES OF LIFE
INSURANCE COMPANIES. Book Rivers.
Bhat, B., 2020. Space liability insurance: Concerns and way forward. Athens JL, 6, p.37.
Birds, J., 2018. Insurance law in the United Kingdom. Kluwer Law International BV.
Boyer, M.M., De Donder, P., Fluet, C., Leroux, M.L. and Michaud, P.C., 2020. Long-term care
insurance: information frictions and selection. American Economic Journal:
Economic Policy, 12(3), pp.134-69.
Cheng, C., Hilpert, C., Lavasani, A.M. and Schaefer, M., 2022. Surrender Contagion in Life
Insurance. European Journal of Operational Research.
Chin, M.H and et. al., 2018. Lessons for achieving health equity comparing Aotearoa/New
Zealand and the United States. Health Policy, 122(8), pp.837-853.
Choudhary, M., 2018. Literature review of life insurance markets: Developing a new perspective
to improve the Indian market. MANTHAN: Journal of Commerce and
Management, 5(1), pp.126-149.
Costa-Font, J. and Raut, N., 2021. Long-Term Care Partnership Effects on Medicaid and Private
Insurance.
Dahiya, M., Sharma, S. and Grima, S., 2022. Big Data Analytics Application in the Indian
Insurance Sector. In Big Data Analytics in the Insurance Market (pp. 145-164).
Emerald Publishing Limited.
Golinghorst, D. and et. al., 2022. Anti-selection & Genetic Testing in Insurance: An
Interdisciplinary Perspective. Journal of Law, Medicine & Ethics, 50(1), pp.139-
154.
Kwadwo Tuffour, J. and et. al., 2021. Life Insurance Companies: Determinants of Cost
Efficiency and Profitability. Journal of Accounting, Business &
Management, 28(2).
Nicoletti, B., 2019. Digital transformation via open data in insurance. In Digital Innovation:
Harnessing the Value of Open Data (pp. 113-149).
Rothstein, M.A., 2018. Time to end the use of genetic test results in life insurance
underwriting. Journal of Law, Medicine & Ethics, 46(3), pp.794-801.
Srbinoski, B., Poposki, K., Born, P. and Van Hulle, K., 2022. Regulatory examinations and life
insurance development. Journal of Financial Regulation and Compliance.
ZULFIQAR, U. and et. al., 2020. Insurance-Growth Nexus: Aggregation and
Disaggregation. The Journal of Asian Finance, Economics and Business, 7(12),
pp.665-675.
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