Pre-existing Condition Vs Affordable Insurance

Securing affordable life insurance is a growing problem as more Canadians are diagnosed with serious ailments. Half of Canadians will develop cancer at some point in their lives, the Canadian Cancer Society says. The Heart & Stroke foundation points to an increase in the number of people with heart conditions and strokes. And about 8 per cent of Canadians have been diagnosed with diabetes, a condition that’s growing in frequency amid an aging population.

The number of Canadians with diabetes has doubled since 2000. As well as diabetes, people with severe mental illness, HIV, heart conditions and other serious ailments can be left in the lurch. Other red flags for insurers can include travel to certain parts of the world or risky recreational activities.

There’s also a trend of people needing insurance for a longer period because they have families later in life or haven’t paid off their mortgage yet.

The issue of pre-existing conditions is a bit of a growing issue because people are needing term insurance longer in their life because of the financial pressures today. Canadian are working later, they’re carrying debt longer, mortgage longer so they feel like they need term insurance to cover off that risk. And so it becomes harder when you’re 60 to 70, because people then have health issues.

Some insurer offer simplified coverage but it comes at a price. Premiums can be 50 per cent to 300 per cent higher than traditional term policies and coverage limits are lower.

Insurance companies have become much more liberal about covering people with health issues. 

Years ago, if you had diabetes … you were declined for insurance, but now most, almost all, diabetics can get some form of life insurance. The situation changed because insurance companies have more data to evaluate life expectancy while medications and treatments have also improved.

No Medical Exam Life Insurance offers two forms of term insurance – Guaranteed Issue for people facing, for example, a serious cancer diagnosis; and Simplified Issue, a less expensive policy used for people with more manageable and less severe conditions.

With new and better treatments come changes from insurers. Canada Protection Plan has followed Manulife and Sun Life, which in 2016 began to offer insurance to some HIV-positive clients.

Traditional carriers require these patients have five years of stability on anti-retroviral therapy, an undetectable viral load and receive treatment by an HIV expert. Manulife precludes those with hepatitis, a history of intravenous drug use or other substance abuse, history of coronary artery disease, diabetes, cancer and AIDS-defining illness.

Canada Protection Plan doesn’t have these restrictions and offers $50,000 of coverage. That’s much less than the million-dollar limit by Sun Life and up to $2-million for Manulife applicants of ages 30 to 65.

Still, not everyone benefits from the insurers’ more open approach. Intravenous drug users, for example are denied coverage, which can be a problem for some people living with HIV.

Insurance companies are encouraged to shorten the five-year treatment requirement to two years since medical advancements have improved life expectancy.

The history of the illness and the public stigma toward those living with HIV has ensured that very few people even contemplate seeking insurance coverage. In the early days of the illness, there was no chance of even considering insurance. But there was a frustrating period after that when people were living longer and having healthier lives and were still being denied insurance as well and it made no sense.

Financial Planner Cheats Client

A former Singapore-based financial planner has been charged with cheating and forgery offences in relation to selling investment-linked policies (ILPs). Seven clients collectively lost more than S$22,000 in policy premiums.

Stedtson Koh, a financial planner working in an unnamed  local bank sold Prudential policy. He subsequently joined Manulife as a financial planner. He convinced his clients that if they buy a new ILP with his new insurer - they would be able to fold in the existing policy. He is accused of forging documents to back up his claims that their policies would be merged.

As a result, his client stopped paying into the savings plans they had taken out with the first insurance company. The original ILPs subsequently lapsed and their premiums were lost.

Stedtson Koh was charged with 14 offences; seven charges were for cheating and seven for forgery for the purpose of cheating. He could face 10 years’ imprisonment and a fine for the seven counts of cheating. Also, he could face a 10-year sentence and a fine for the seven counts of forgery for the purpose of cheating.

EPF & Insurance Tax Relief 2019

The Inland Revenue Board Of Malaysia (IRB) has increased its assessment year 2019 resident individual tax relief for life insurance and Employees Provident Fund (EPF) contribution to RM7,000 from RM6,000 in 2018, the IRB said on its website.

According to the IRB's assessment year 2019 tax relief schedule for resident individual, those in the pensionable public servant category are entitled to a restricted RM7,000 tax relief for their life insurance premiums.

For individuals outside the pensionable public servant category, the IRB said life insurance premium tax relief is restricted to RM3,000 while contribution to the EPF or approved scheme is entitled to a restricted tax relief of RM4,000.

Central Claim Centre Thailand

Thai Life Assurance Association (TLAA) plans to set up a central claim centre, pooling all health insurance claims to improve convenience for claimants and hospitals, reducing claim processing costs and helping prevent insurers from overclaims.
If the central claim centre is incorporated, all health insurance policyholders can make claims at a single point regardless of their insurer. The concept is for a claim for medical bills to be shared in proportion or based on policies that are taken out first, in case of multiple health policies. Making a claim for multiple health benefit policies is a time-consuming process because some insurers require an original receipt for hospital bill claims to prevent policyholders from overclaiming.

Many life insurance companies offer uncomplicated products through the digital channel, but the industry still lacks sharing facilities, unlike the banking industry, which has ATM pools, or the Stock Exchange of Thailand, which has a clearinghouse for net settlement of securities trading for brokers.

A central claim centre will allow hospitals to view all the health insurance benefits for patients, instead of checking from life insurers' websites one by one. The idea helps insurance policyholders, hospitals and insurers not only cut costs, but also supports the ecosystem for digital insurance in the future, said Ms Nusara.

The TLAA is bracing for an aged society in the near future, as demand for healthcare is likely to increase. Life insurers should provide better services for customers than we do now. Thai Life Assurance Association (TLAA) plans to set up a central claim centre, pooling all health insurance claims to improve convenience for claimants and hospitals, reducing claim processing costs and helping prevent insurers from overclaims.

Jiwasraya Risky Investment

The Attorney General Office is opening an inquiry into a possible corruption case at Asuransi Jiwasraya that has led Indonesia's largest state-controlled insurance company into the brink of bankruptcy. 

Attorney General S.T. Burhanuddin said on Wednesday his office suspected foul play in Jiwasraya's previous directors' decision to put the company's assets in risky instruments, causing Rp 13.7 trillion ($986.4 million) in potential state losses by August 2019. 

"That's the initial estimate. We expect the real figure to be higher. The directors' action violated principles of good corporate governance in the management of funds raised through insurance programs and savings plans," Burhanuddin said. 

Burhanuddin said Jiwasraya had violated the principle of prudence by investing in high-risk assets to pursue more profits. Jiwasraya held Rp 5.7 trillion, or more than 22 percent of its financial assets, in stocks. Most of the stocks, however, are third-tier stocks that have been performing poorly. Only 5 percent of Jiwasraya's stocks have produced good returns. 

Jiwasraya also invested Rp 14.9 trillion, or 59 percent of its financial assets, in mutual funds. They performed even worse than its stock holdings. A total of 98 percent of Jiwasraya's mutual fund holdings were managed by underperforming investment managers.

The insurance company has already announced that it was unable to pay Rp 12.4 trillion in insurance claims due this month.  

The State-Owned Enterprises Ministry said it has evaluated a plan by Jiwasraya's subsidiary Jiwasraya Putra to sell Rp 9 trillion of its assets to a number of strategic investors. 

Jiwasraya controls 65 percent of the subsidiary's shares. The rest belong to other state-owned companies Telekomunikasi Seluler (Telkomsel), Pegadaian and railway operator Kereta Api Indonesia. 

Prospective investors in the sale will perform due diligence and make their bid as soon as next month. The ministry said Jiwasraya will sell 60 percent of its shares in Jiwasraya Putra and use the proceeds to pay its policyholders. 

PNB Declared Lowest Dividend

This week - Permodalan Nasional Bhd (PNB) declared its lowest ever return - a dividend of 5.5% including bonus. . PNB is the largest fund management house in the country and there are more than 14 million Malaysians who own Amanah Saham units. Its flagship fund, Amanah Saham Bumiputera (ASB) unitholders have been enjoying returns of 7% to 8% over the past 29 years.

PNB attributed the weak performance on the local stock market, which is down more than 7% this year and currently trading at its lowest in three years. It is not only PNB which is suffering. The country’s largest fund, the Employees Provident Fund (EPF), just last week warned that 2019 has been a difficult year for the fund and the uncertainty in the market would affect the performance of the fund.

The EPF is expected to declare its annual dividend early next year when it announces its full-year results. For its third quarter of 2019, EPF saw a 7.6% drop in total investment income compared to a year earlier. It said this was due to the uncertain and volatile capital market that has worsened since 2018.

What is also clear is that the entire privately run unit trust industry is also in the doldrums, returns-wise. Funds focused on buying Malaysian stocks made an average return of about 2.24% over the last 12 months. The performance of all these funds, which have exposure to the local stock market, is only to be expected.

The FBM KLCI, which gauges the performance of the top 30 companies on Bursa Malaysia based on market capitalisation, has been the worst-performing index in the region. The index has declined by more than 7% this year after it fell almost 8% a year earlier. While the US-China trade war is one of the main reasons often cited for the weak market, it is worth noting that Malaysian corporate results have also suffered.

Many equity analysts covering the Malaysian market have been continuously lowering their corporate earnings growth forecasts since the beginning of the year. For example, MIDF Research is targeting a mere 1% growth in corporate earnings for 2019.

Meanwhile, the MSCI Emerging Markets index, which tracks big stocks in markets like China, Taiwan, Indonesia and India, rose by 8.5% over the first 11 months of 2019. Also, major equity indices in the United States, United Kingdom, Europe, Japan and Asia made returns of between 9% and 23.4% over the same period. This has led to the few local funds that invested in overseas equities to perform better.

The Lipper Fund tables showed that on average, funds focused on Asia-Pacific equities made 8.23% return for the last 12 months. Meanwhile, funds that invested in global stocks made an average return of between 10% and 11.7%.

Westpac Fined $9 Million

Westpac has been fined $9.15 million by the Federal Court after one of its financial advisers gave inappropriate advice to clients. Corporate watchdog ASIC took the bank to court accusing former Western Australian Westpac employee Sudhir Sinha of breaching the Corporations Act by failing to act in his clients' best interests.

Mr Sinha worked for Westpac in Perth from 2001 to 2014. He gave advice to four couples during 2013 and 2014, recommending they take out superannuation or insurance products or policies with companies or entities associated with Westpac.

"Both Westpac or its associated companies and, indirectly, Mr Sinha earned not-insubstantial fees and commissions from the implementation of Mr Sinha's recommendations," Justice Michael Wigney said in handing down his findings.

The Federal Court found Mr Sinha contravened the Corporations Act 22 times. Justice Wigney ruled Westpac was responsible because it failed to make sure Mr Sinha acted efficiently, honestly and fairly. As the facts of this case reveal, that rather cosy arrangement turned out to be fruitful for both Mr Sinha and Westpac, but not always for their clients.

However, he found ASIC failed to prove Westpac's senior managers actually knew about the risks posed by Mr Sinha. Westpac fired Mr Sinha in November 2014. This was considered a test case of the extent to which financial services licensees, such as banks, are responsible for the conduct of advisers.

In 2017, ASIC banned Mr Sinha from providing financial services after finding he "systematically failed" to meet his obligations over six years. The 2017 ASIC investigation found 177 clients were charged fees but did not receive service from Mr Sinha, including at least nine clients who did not receive reviews despite paying for ongoing service.

The regulator also found Mr Sinha was not adequately trained or competent and banned him from providing financial services until June 2022.

Genes Poor Predictor Of Disease

A Canadian research has recently found that genes may have less to do with our risk of disease than we think, and factors such as environment and lifestyle could play a bigger role. Scientists at University of Alberta, reported that the new meta-analysis is the largest of its kind ever conducted, looking at two decades of data and 569 studies that explored the link between genetic variations known as single nucleotide polymorphisms (SNPs) and different diseases and health conditions.

The findings, published in PLOS ONE, showed that in most cases, an individual's genes play a less than five per cent role in their risk of developing a particular disease. Simply put, DNA is not your destiny, and SNPs are duds for disease prediction,” said co-author David Wishart. “The vast majority of diseases ― including many cancers, diabetes and Alzheimer's disease ― have a genetic contribution of five to 10 per cent at best.

However, the researchers did point out that they found some exceptions, including Crohn's disease, celiac disease and macular degeneration, which have a 40 to 50 per cent genetic contribution.

Despite these rare exceptions, it is becoming increasingly clear that the risks for getting most diseases arise from your metabolism, your environment, your lifestyle or your exposure to various kinds of nutrients, chemicals, bacteria or viruses.

The researchers also commented that the findings go against the claims of many gene-testing business models, which suggest gene testing can accurately predict someone's risk for disease. Instead, the team says that non-genetic indicators may actually provide a more accurate measure of disease risk.

The bottom line is that if you want to have an accurate measure of your health, your propensity for disease or what you can do about it, it's better to measure your metabolites, your microbes or your proteins ― not your genes. This research also highlights the need to understand our environment and the safety or quality of our food, air and water.