It has revealed a new health insurance product that will cover surgical and non-surgical treatments up to $500,000, including new anti-cancer drugs that are not funded by Pharmac.

AIA customers who purchase the Real Life policy together with other insurance policies receive an escalating discount per extra policy.

The policy goes on sale on October 12.

National sales manager Graeme Edwards said the insurer knew it needed to improve its policies.

But he said it was decided that if something was to be done, the product should be future-proofed and done properly. “We thought ‘let’s do a bit of catch up but take the lead too in some way’. Anybody can follow.”

AIA is closing one of its policies, Superior 3 Health, to new customers.

The policy covers minor pre-existing conditions after it has been in force for three years. Edwards said all applications that were already under way would be issued and customers could add family members to the policy but it would no longer be offered to new customers from October 12.

He said big players in the market had been involved in a “market share grab” offering to cover customers’ pre-existing conditions if they took out new policies.

But he said AIA did not want to play in that market. “It destroys your risk pool and everyone else who has been underwritten properly suffers.”

He said AIA wanted to manage its health cover in a way that was sustainable.  “This is not a market share grab, this is about the evolution of AIA in this market.”

AIA chief executive Natalia Cameron said AIA’s Real Health policy would make a real difference to ordinary New Zealanders who might not otherwise be able to afford the latest cancer immunotherapy medicines.

“We’re serious about investing in New Zealanders’ health and this is the first of a number of innovative initiatives that we will unveil in the coming year,” she said.