Journalist Lorna Tan did a write up on Major Illnesses Coverage in Sunday Times 2017-09-17 and let me first say how much I admire her work and her articles. She is terrific in scope and most importantly, is deemed independent under the current regulatory compliance framework of the industry I operate within. This independence is highly prized.
So where does this put me? I, for one, don’t believe in reinventing the wheel. There is little value in repackaging existing content that has been well articulated in today’s media. Generating good relevant content is hard work which I am not remunerated for, that is the truth. For the work that I do, this write up of mine does not put food on the table to feed my family.
Where is my value? It is in the Design Driven Innovation Approach that I apply towards Financial Planning.
What in the world is Design Driven Innovation? It is best described using an example. So let us focus on Major illnesses coverage.
In financial planning context, it is an independent area of coverage apart from death, disability, hospitalisation and personal accidents. It is meant to cover post hospitalisation living expenses arising from a defined major illness (early stage or not). Payouts are in lump sum and the insurer does not bother how the lump sum payout is used. Technically, outpatient expenses such as chemotherapy and kidney dialysis ought to be covered in shield plans already. Therefore, theoretically speaking in financial planning, that lump sum payout is meant for living expenses because likely one is not able to work for a year or so upon such a diagnosis. So if you are inadequately covered for hospital expenses, you are not barred from using the proceeds of the lump sum payout to offset medical bills also.
Digging deeper down into this area of coverage, there are a number of insurers with different plans/riders to provide such coverage. There are a variety of features that make things hard to compare at times, and I must agree. Let us call this a state of competing priorities.
I have listed some of those varying features in the featured image. Trust me, insurers do not want their products easily compared. Their stance is offering a different value proposition. This standpoint has its validity.
Where does Design Driven Innovation come in? It is applied as such. It goes into a design, customisation, tailoring mode that seeks to identify which feature is most meaningful and a higher priority to YOU. It does not seek to re-order your preferences towards a bias end point.
Where budget permits, it may even result in a blended solution between companies X & Y in 40% & 60% ratio to obtain the necessary features for a given targeted sum assured desired. That is the spirit behind Design Driven Innovation.
But before this approach can be applied, the advisor must have the breath of financial products available for execution. Design Driven Innovation is client centricity, articulated.
I once had a client who was considering between AIA and Aviva for this area of coverage. Though I am able to provide execution for both, she openly told me that if she were to choose AIA, she would let another agent implement. AIA’s plan provided cash value, waiting period between multi-pay was 12 months. Aviva’s plan waiting period between multi-pay was 24 months and had better totalpayout/premium ratio. She chose AIA for implementation. Did I try to re-order her preferences? No. Could a blended solution be proposed? Yes but budget did not permit.
For Design Driven Innovation approach towards Financial Planning, look for Isaac Fang. +65 9730 6977.