Managing director Naomi Ballantyne has fronted a new podcast for advisers, in which she expands on comments made to Good Returns about the Vitality programme, through which people can achieve premium discounts by exhibiting good health and wellness.

She said, while it seemed logical that health and wellness should go “hand in hand” with something like life insurance, “I’m not sure that the answer to the question is that simple”.

She said Partners Life believed it was there to support people when they stopped being well – and benefits that were only available to people in good health were an anathema to that.

“We don’t want to select out any group of customers on the basis of their existing health.”

She said each client would be fully underwritten with the lowest possible premium for the greatest amount of coverage and they should be able to lock that in for the life of their contract.

“Encouraging New Zealanders to take their health seriously by being proactive is a wonderful objective … but not all New Zealanders can proactively manage their health to prevent things happening. We do’t think they should miss out on rewards based on things they don’t have control over.

“We don’t think it’s appropriate that the premium payable by the client should be contingent on their ongoing wellness behaviour as a proxy for health long after the underwriting was completed.”

She said one of the key protections of life insurance was that once cover was issued, an insurer could not adjust pricing specifically for the individual in response to their health changes.

Ballantyne said she did not think inducements of this nature had a part in the provision of life insurance.

If someone’s discounts reduced due to a worsening of their health, that was the same as adding premium during the life of a policy she said. That could be a shock, especially for clients who chose the policy for the discount.

She said people who had to cancel a policy for affordability reasons as their health was deteriorating could be vulnerable and the advice process that led them there could be put under scrutiny.

If pricing could increase due to the removal of a non-guaranteed wellness discount after a claim because it affected a wellness score, a regulator might see that as punishment for a claim, she said.

“Can reliance on non-guaranteed discounts as part of an advice recommendation be fully defended, with certainty, in future if the value of those discounts reduce?

“Could any inducement outside of the financial product being advised on, which is not guaranteed for the lifetime of the financial product, but which is only available if a particular financial product is purchased, be viewed as potential conflict?”

She said if there was a fee for the “uncertain” discount that trade-off would be difficult to assess with certainty.

Len Elikhis, AIA NZ chief product and Vitality officer said: “AIA Vitality is a health and wellbeing programme that exists in over 18 markets and has been consistently shown to deliver value through improved claims, which is shared with customers through premium discounts. Sources of this claim health improvements arise from health checks, physical activity, and healthy nutrition that the Vitality programme encourages. Customers will never pay more than for their cover than our standard market offering. The AIA Vitality discount applies to any health loading (eg high BMI) which for those that initially present health issues it will help to make cover more affordable.”