Much debate has emerged surrounding a new life insurance style product for pregnant mothers recently launched in Australia and reported here in the Sydney Morning Herald. We couldn’t find the policy details on the insurer’s website so we'll just have to rely on what's been reported...
The product is aimed at women aged 16 to 40 and pays out up to $50,000 if there are complications during pregnancy or if the child is born with defects such as Down syndrome or blindness. Whilst on the surface such a product sounds like a good idea, the insurer appears to have come under fire from all sides, with criticism levelled at the way the product has been designed, the pricing and even it’s very purpose.
For example, the NSW Midwives Association has reportedly criticised the policy, saying the insurer is marketing fear to expectant mothers" and “Insurance companies are going to go where they can make a buck ...” whilst the president of the Australian Medical Association said it was an “interesting approach to a vulnerable market”. Ouch!
There’s been several pot-shots at the product design as well. For instance, the policy pays child benefits up until age two. But many defects or inherited conditions are not diagnosed until after age two, such as autism and a raft of other motor or nervous conditions, resulting in policy holders that would miss out on a claim. Furthermore, the policy is supposedly designed to deal with the fact that women are bearing children later – well into their 40’s. Yet, the policy is unavailable to women over 40 – in other words, unavailable to the very women that need the policy most!!! Big help.
And then just to cap this off, it seems you can only buy this product if you first buy a life insurance policy from the same insurer. Nice touch!
Finally, the Sydney Morning Herald article quoted a monthly premium of around $37 for a non-smoking professional woman aged 32. The policy pays a maximum of $50,000 for conditions such as an ectopic pregnancy and as little as $10,000 for a still birth.
But wait a minute, the same 32 year-old woman can buy $1,000,000 of life cover for the same $37 per month!!! So maybe there’s room for the insurer to shave a few pennies off the price??? If this was an investment product we’d be calling it ‘fully priced’.
So to wrap this up.... good idea in principle, but jury’s out on the product that’s on offer.
Interested in your thoughts.