I wrote recently about a new approach Asteron was taking to income protection.

In the right client situation quite appropriate, in others it would potentially be a disaster. As the options in insurance advice expand and hybrid or niche products develop, the need to have an adviser involved is even more apparent. One that really understands the application of insurance benefits to your risks.

Looking back 30 odd years ago we only had two insurance policies available. Whole of life and endowment, in basic terms they worked if you died and not much else. Yes, you could borrow on them, if you had sufficient value accumulated, in the situation something happened and you needed financial support. Reality from what I have experienced in the last 15 years, most people drew on them to buy a boat.

The point, life insurance planning in the past has been quite limited in what it could really do. Since then, we have had the introduction of Medical Insurance, Trauma, TPD, and Income Protection. All of which enabled financial support at differing levels of medical impairment and need. These base benefits form the building blocks for most insurance planning today.

Back at the turn of the century, 2000, pretty much that was it. Those five types of cover were it. Since then we've had variations released specific to business, basic and comprehensive trauma policies, comprehensive and major medical policies, and a flurry of income protection related benefits.

Today in the base five benefit categories we have.

• Life cover, paid as a lump sum or monthly for a period of time.
• Trauma cover, basic and comprehensive and recently progressive and severe options.
• Total Permanent Disability, own and any occupation, now with a couple of severe trauma events that pay claims too
• Income Protection probably has the most variation. Mostly the same product, with differing methods of acquiring the cover or calculating the financial claim. Mortgage Protection possibly the most recognised, we also have new to business and start up options, household expenses, farmers and rural, key person and business overheads.
• Medical & Health insurance in it's many forms

Now we're starting to see some specialty infill options.

In the trauma space

The progressive and severe options are starting to emerge.

In the past trauma cover only covered really serious conditions and fewer of them. Over time trauma cover has started to pay for less severe conditions and for a wider number of conditions. This has had an effect in a number of ways. Better product quality ratings, higher numbers of claims and the corresponding increase in premiums.

What's happening with the progressive and severe options are products that go back to the basics in some ways. They only pay, or only pay a full claim in the most severe situations. As they are harder to claim they are cheaper to buy and hold on to. But there's a trade off, in the less severe situations there is little to no financial support. So these products should be additional to, not a replacement for normal trauma cover.

In the income protection space

We have some creep towards trauma cover benefits with the inclusion of injury and trauma claim options as well as covers that only pay in specific situations.

In the past there has been a horrible product on the market where you have to both suffer a traumatic condition and be unable to work to get a claim. It was considered an alternative product to income protection for risky occupations. Frankly you're better off with a plain old trauma policy, much greater chance of actually getting a claim paid.

Recently we've had Partners Life launch a specific condition benefit that pays a multiple of the insured benefit. As this product doesn't have a working test for a claim, it's more like a trauma cover than income protection, it pays on the diagnosis of an event, like trauma does. The difference being is the specific conditions are more aligned to the sorts of things that stop people working, including most trauma conditions.

Why have this?

For the risky occupations and the non earning occupations out there. It's an elegant solution for them. As there isn't an occupation capacity test for a claim.

As the product won't cover typical back and mental health claims, here we mean back pain rather than impact paralysis for the back. Another target market are those who face exclusions for back and mental health. Additionally, it's for those who don't want to have the hassles associated with income protection claims, especially with exclusions.

While the policy is somewhat complicated to read, it's quite black and white in terms of claims. You break an ankle you get x times the cover amount. You have a heart attack you get Y times the cover amount. Up to a maximum of 60 times the cover amount.

On the medical front

We're seeing covers all over the shop. Ones that cover just GPs and Dental, to basic GP medical and specialists, to specialists and testing on its own, underwrite now and take your cover later, all the way through to base hospital plans, major medical and full comprehensive covers. It's a minefield here and it's getting worse, with new covers that pay if only of you have to endure the public system but not private coverage.

So what's the answer?

Talk to an adviser, Talk to me. I can work through the options in the market for you to come up with the most appropriate plan.

I'm a free advisory service to you. The insurers pay my bills. Yes, it's commission, with it being relatively the same across all providers, I'm more interested in giving you financial security with your risk coverage, than clipping your ticket.

Prove it? We're looking at the commissions paid and where they are in excess of what we consider reasonable for the time and effort for your situation, we're applying lifetime discounts on our client’s new policies. Which we're happy to show you when we chat.