MANULIFE Philippines is seeking to make its investment-linked insurance
products more competitive against the options offered by other insurers
and even banks by removing its medical requirements.
"There is a growing number of people looking for investments. We are
offering them not just investments, as banks can provide, but these come
with insurance protection as well, without the hassle of the medical
requirements," Manulife Chief Operations Officer Margarita B. Lopez said
in a phone interview on Friday.
Insurers require clients to answer medical questionnaires and comply
with health requirements in order to get life insurance. This allows the
company to build in the risk to the cost of the insurance policy, as
well as identify high-risk individuals who are uninsurable.
Investment-linked products, however, have a small insurance component,
Ms. Lopez pointed out.
"A small portion of the premium goes to insurance, and most of it goes
to the investment vehicle. For most of our clients who purchase these,
their primary reason is they want to invest," she said.
"This is us listening to our clients who don't want to be hassled or who
are not comfortable with submitting their medical records and going to
check-ups," Ms. Lopez explained further.
The guaranteed insurability endorsement (GIE) program, which removes
these health requirements, cover Manulife's single-pay investment-linked
insurance products, Affluence and Affluence Max.
These policies allow clients to invest their premiums in their choice of
equity or fixed-income funds and in life insurance.
According to Manulife's latest figures, these investment-linked products
comprise close to a quarter of the company's business, Ms. Lopez said.
The GIE is expected to boost Manulife's competitiveness, now that it is
easier for clients to do business with the insurer, Ms. Lopez said.
"We hope this can increase people's understanding of the financial
instruments we have on offer. A large portion of the people who
hesitated from buying insurance before can now reconsider," she explained.
However, Ms. Lopez assured that the GIE program will not unnecessarily
expose Manulife and its policyholders to risk, with the medical
requirements of certain products removed.
"We have studied the trends over the years, and we saw that if we offer
the products to everyone, not all of them will be high-risk. It's just a
game of balancing the risks," she said.
In addition, Manulife also modified the death benefits of the Affluence
products under the GIE program to take into consideration the cause of
death and the time of death from the policy issuance date.
"If the insured passes away during the first two years of the policy, he
or she will have scaled-down benefits. The policy has not been in-force
for very long," Ms. Lopez said.
"But if the death occurs after the two-year mark, the chances are the
insured was not a high-risk individual, and he or she would get more
benefits," she explained.
Under the GIE program, clients aged 0 to 50 can pay up to P4 million in
premiums for their investment-linked insurance products. Clients aged 51
to 70 can invest up to P2 million.
Manulife Philippines is the country's seventh largest life insurance
company, with P3.975 billion in premium income last year, according to
the latest data of the Insurance Commission.
It is a wholly-owned domestic subsidiary of Manulife Financial, a
Canadian-based financial services group operating in 22 countries and
territories worldwide. -- Diane Claire J. Jiao
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