1. Life insurance involves lots of intrusive medical tests and insensitive questions for the LGBTQ+ community
The myth: The processes and assumptions used by insurance providers, such as medical tests and forms, are always intrusive and discriminatory against the LGBTQ+ community.
The reality: 47% of LGBTQ+ Australians say they have experienced discrimination or exclusion when applying for insurance.1 However, at Zurich, we’re working hard to ensure that the LGBTQ+ community receives respectful treatment when applying, renewing and claiming on our life insurance products.
We know from industry-wide surveys that the negative experiences LGBTQ+ people have faced include having gendered assumptions made about themselves or their partner or being asked intrusive questions about their sex life. People living with HIV reported higher rates of being denied insurance. Disturbingly, three-quarters of trans and gender diverse respondents find it difficult to self-declare their gender with insurers.1
At Zurich, we’re training our people, adjusting our application and claims processes and the way we collect information so members of the LGBTQ+ are comfortable approaching us. We don’t discriminate because of who a person loves or their affirmed gender. In fact, we don’t ask intrusive ‘lifestyle’ or ‘sexual health’ questions at all.
If you have an existing policy with Zurich, for example, you can update your name and gender in our systems to match your affirmed gender.
Of course, there will be times where anyone applying for life insurance may be required to answer questions or undergo tests. For example, products sold through a financial adviser may require some medical tests before approval, but it’s often as quick and simple as a single blood test and a medical examination. The purpose of these tests is to ensure your cover accurately reflects your health and medical history. At Zurich, we will always clearly explain the purpose of any test or questionnaire we ask you to take and frame our questions respectfully.
In some cases, LGBTQ+ people may be statistically more likely to have some pre-existing health conditions or risk factors – for example, risk factors relating to a history of mental health conditions. That may sometimes mean we need to apply a premium loading or policy exclusion. It’s important to understand that those loadings and exclusions are only applied because of an individual’s risk factors, not on the basis of sexual preference or gender identity.
If you have an existing medical condition, you may be asked to provide extra information. You generally won’t be covered for serious or significant pre-existing conditions, so it’s important to establish upfront what those conditions are, so you know exactly what might be included in your policy.
2. Insurance is only for families
The myth: If you’re young and child-free and don’t have a mortgage, you don’t need life insurance.
The reality: Life insurance can protect your financial dependants if something happens to you. But it isn’t just about paying off debts and helping dependants. It’s also a way to look after yourself if something were to happen.
Life insurance could provide you with an income if you became ill or disabled and couldn’t work. So you wouldn’t have to ask anyone to help cover your day-to-day expenses, or pay the costs of adapting to a life of disability.
With the right insurance, you don’t have to rely on anyone else – you can continue to manage the bills on your own and keep your independence.
Life insurance can also be used to provide a legacy to a cause or not-for-profit that’s close to your heart.
Income protection cover helps you out with a regular benefit payment when you can’t work, covering up to 70% of your before-tax income (excluding super contributions). Or you may consider total and permanent disablement (TPD) insurance, which gives you a one-off lump sum payment if you become totally and permanently disabled. There’s also trauma cover, which protects you from the financial impact of severe conditions such as cancer, heart attacks and stroke with a one-off lump sum payment.
There are some real benefits to applying for life insurance if you’re young and healthy. The premium you pay may be lower when you’re young and have just taken out insurance Although your premiums might rise over time, the fact you already have insurance means you don’t have to worry about being ineligible for cover later if your health changes (see myth #6).
3. My super fund has me covered
The myth: You have enough life insurance cover through your super.
The reality: While cover through super is great to have, many policies only provide the basic levels of cover. This cover may be less than what you need to protect your loved ones from financial hardship. Also, trauma can’t be covered by insurance held through super either. If you’re one of the 16% of same-sex couples who have children,2 it’s even more crucial to be aware that your family might not be 100% covered should something happen to you.
Research by independent actuaries Rice Warner shows the average default insurance from super funds meets only 65%–70% of average household needs – and for families with children, it’s even lower.3 That’s why it’s a good idea to check what insurance cover your super fund offers and talk to a financial adviser about the level of protection you need, now and in the future.
4. It’ll be hard to get paid if I make a claim
The myth: Insurance companies make it hard for LGBTQ+ people to make a claim and many don’t end up receiving a payment.
The reality: At Zurich, we have worked to ensure our questionnaires are relevant and respectful of all our customers. We also make it clear in the application process what your life insurance covers you for and what is excluded.
Surveys of the LGBTQ+ community have shown that around 40% of respondents are reluctant to make an insurance claim due to fear of stigma. This means, in effect, they are paying for insurance they may be hesitant to use.1
However, based on current data, 91.5% of all life cover claims are paid in the first instance by the insurance industry. And if you go through a financial adviser, that figure is even higher at 96.6%.4
So long as you fulfil your duty to take reasonable care not to make a misrepresentation when you apply for cover, meet the policy terms, and you’re covered for the medical condition you’re claiming for, you should be confident your claim will be paid.
5. I’ll be paying for unecessary cover
The myth: You’ll be stuck paying for cover you don’t actually need.
The reality: Nothing is static. People’s situations change and life insurance is designed to change with you and your circumstances.
The right life insurance cover is flexible, giving you the freedom to change your level of cover and update your policy as your situation changes. In some cases, this you may need to provide additional information to assist with underwriting your amended policy.
So, if something changes in your life – whether you have a new house, a new partner, a new child or a change of gender – we can help you update your insurance or amend your cover so you’re still fully protected.
A financial adviser can help you work out how much cover you need at any given time depending on your individual situation. This ensures you’re not paying for any cover you don’t need.
6. My cover won’t adapt with my changing situation
The myth: You won’t be covered if your health changes or deteriorates.
The reality: What you’re covered for at the start of your insurance policy won’t change, even if your health changes.
In fact, you don’t even need to tell your insurer about a change in your health, unless you are increasing your cover, adding benefits or making a claim. And if you have an existing policy with Zurich, and your name or gender change, you can update them in our systems with no need to take out a new policy.
7. I’m already covered by workers’ compensation
The myth: Workers’ compensation provides enough cover if you have a work-related accident or injury.
The reality: Workers’ compensation provides some protection for work-related accidents or injuries.
However, even if you are covered by workers’ compensation, the benefits can be capped. This means the cover amount and duration of payments could fall short of what you really need. And if your illness or injury isn’t work related, workers’ compensation won’t cover you.
