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Policyholders between 50 and 59 cost AIA the most in claims

We constantly get the message that health costs rise exponentially as the population ages but AIA NZ's data for 2023 shows that those aged 50 to 59 had the most claims accepted and accounted for more than a quarter of total claims.

Monday, June 10th 2024, 6:44AM 3 Comments

by Jenny Ruth

AIA paid out more than $197 million in calendar 2023 to those in this age group out of $734.8 million in total claims.

The life and health insurance company says it accepted 92% of claims from its more than 800,000 policyholders.

The bulk of payouts, $87.03 million, to those between 50 and 59 was on life policies with $50.59 million paid to those with cancer. It paid a total of $263.5 million on all life policies in the year with 60% of claims being for cancer.

The insurance company says it planted a tree for every customer who died during the year.

  • Those aged between 60 and 69 claimed a total of more than $139 million, with $65.55 million being on life policies, while those aged 70 and over calimed just $71 million, with $50.52 million being against life policies.
  • Those aged between 40 and 49 claimed more than $127 million with $41.9 million on life policies and the major cause of death was cancer, which resulted in $41.9 million in claims paid.
  • Those aged between 30 and 39 claimed $48 million with $15.7 million going on life policies and cancer deaths accounting for $4.7 million of the total.

Low claims among the young

Unsurprisingly, only $2.6 million was paid in claims against life policies for those aged 20 to 29, with another $7.7 million paid on health policies.

Heart disease was the second largest category of life claims, accounting for 14% of total claims, with neurological conditions acccounting for 8% and respiratory problems for 5%.

Among the $143.1 million paid out on health policies, musculoskeletal disorders accounted for a quarter and cancer for another 22%, but cancer was the main cause of the $117.1 million paid on trauma policies, accounting fro 61%, with another 17% due to heart problems.

The company paid out $85.5 million on income protection policies and another $17.3 million on permanent disablement policies.

AIA NZ's head of claims, Travis Higgins, says a range of factors influence the claims statistics.

“As people age, they may wish to adjust their insurance cover to meet their changing needs. For example, as people head into retirement, they may have reduced their debt (for example, mortgage) and it could be appropriate to reduce their life cover accordingly,” Higgins says.

While there are fewer claims from younger people, who do tend to be healthier, “it's also fai4r to say there is a large protection gap with this group,” he says. Meaning younger people tend to think they're bulletproof and are therefore less inclined to insure.

Higgins says that life changes, such as buying a home or strating a family can prompt people to take out insurance.

“Cost of living is also a factor, which is why it is important for insuers to offer a good range of products and options to suit people's changing needs at different stages of their lives. We also always encourage people to engage the help of a financial adviser,” he says.

The AIA claims data does clearly demonstrate the risk of serious illness “significantly increases as New Zealanders get older.”

Tags: AIA

« [Opinion] Debate on funding cancer drugs good time to spread the word on health insuranceLeg up given to get more diversity in adviser industry »

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Comments from our readers

On 10 June 2024 at 4:36 pm r murray said:
To make this even more meaningful the exposure needs to be introduced here so the rate of claims by age cohort is known.

Otherwise it is like saying most there are more deaths in Auckland than Dunedin.

The need for cover may drop off at the higher ages above say 70 which means less exposure and then less claims than in say the 50s age group.

On 11 June 2024 at 5:11 pm JPHale said:
No surprises here.

Those in their 50's have the highest chance of something going wrong, with those in their 60's dropping cover in droves as they can't maintain medical premiums into retirement.

On 13 June 2024 at 4:22 pm liam n said:
Hi JP I think you have made a mistake and are mixing up the absolute number of claims by age and the rate of claims by age.

You are right that cover is dropped by those in their 60s and above. So there is less exposure in the 60s than 50s and even though the chance or rate of claim likely increases with age the absolute number of claims is lower in the 60s reflecting a lower exposure.

However you say those in their 50s have the highest chance that is their rate is the highest. The AIA person and @r Murray point out this article is about the amount of claims being highest in the 50s not the rate or chance of claims.

Important difference. Unless you are predicting that NZ will suddenly have higher mortality or morbidity rates in the 50s than the 60s.

We all make mistakes so no harm done.

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