Less cover for pregnant women
Joycelyn is one of four female teachers at Abele Nursery School. She was just ‘diagnosed with a two-month-old pregnancy’. She has since been attending antenatal care. In August 2014, Precious Atombo, an insurance Sales Manager of Noko Life Insurance Company, and her team were in Joycelyn’s school to educate interested teachers on life insurance products and possibly sign them on.
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Out of 15 teachers, nine, including Joycelyn, expressed interest in purchasing a number of products ranging from investment-linked insurance policies through education to funeral policies after they were convinced by the sales team. When it got to the turn of Joycelyn, Precious (the Sales Manager) agreed to register her but told her, ‘I’m sorry, Madam, to let you know that even though you indicated deductions of premiums from the bank to commence at the end of October 2014, we cannot do that until after seven months. In other words, we have to defer your cover until after seven months from now and then we can advise your bankers to effect the deductions and put you on cover.’
Joycelyn was not happy with this ‘excuse’ from Precious and her team and wondered what was wrong with her that she could not be put on cover now.
The standard practice
It is important to note that, for underwriting purposes, in completing life insurance proposal forms, proposers or applicants are usually made to complete the insurability section which seeks to know if the proposer has any pre-medical conditions or medical history. This will help in determining the level of cover to be given to him/her. The risk level of the proposer is necessary to ensure that the risk pool is fairly balanced.
Among the insurability questions is a particular one specially directed at women seeking to know whether they are ‘pregnant’. Please note that some insurers have started taking out this question from their proposal forms and that is refreshing to know.
Field underwriting (by agents)
Technically, once a female applicant indicates ‘Yes’ to this question, she stands the ‘risk’ of having her cover deferred/postponed. If such a woman is not fortunate to have an agent with a sense of professionalism to educate her properly right from inception, chances are she would be wondering the reason(s) her premium deductions are not being effected against the due dates indicated.
Similarly, an agent with the urge to mis-sell can ask her to skip that question and later put ‘No’ in that column even when the answer is a ‘Yes’. Premium deductions could take effect and successfully sail through till policy maturity or till the insured event does occur.
Post-claim underwriting
The reality may only dawn on the next of kin of that woman, when in the course of delivery she sadly passes on due to complications related to labour or delivery resulting in what could be termed, “post-claim underwriting.”
The rate of maternal mortality
Maternal mortality has been with us since time immemorial but is decreasing at an ascending rate. Globally, an estimated 289,000 women died during pregnancy and childbirth in 2013, though a decline of about 45 per cent from levels in 1990. The figures still remain alarming with some countries in Asia and Northern Africa having halved the number of maternal mortality cases, with most of the women dying because they had no access to skilled routine and emergency care.
Albeit the fact that there has been a significant progress in sub-Saharan Africa as well, the developed countries are better advanced. In the developed world where a woman's lifetime risk of dying during pregnancy and childbirth is one in every 3,700, the risk of maternal death is very high at an outrageous one in every 38 in sub-Saharan Africa!
To make matters more sophisticated, most insurance policies categorise pregnancy as a pre-existing medical condition and the cost can increase significantly for a high-risk pregnancy. In many such cases, the excitement of being pregnant quickly disappears because of the worry and anxiety associated with the financial burden that can arise as a result of maternal mortality or complications therefrom.
This probably explains why most insurance plans have made it a pre-existing medical condition permissible only after the expectant mother ‘bursts’ safely. The reasons range mainly from pregnancy-related complications that include ectopic, hospitalisation benefits, among others which can be quite costly to life insurers.
The perspective of the Millennium Development Goal (MDG) 5
Among the World Health Organisation’s (WHO’s) working areas under the Millennium Development Goals (MDG), MDG 5 is to save lives of women who are at risk of dying from complications during pregnancy and childbirth, hence the emphasis on:
• Advocating investment in maternal and newborn health by highlighting the social and economic benefits and by emphasising maternal mortality as human rights and equity issue.
I am sure this does not exclude life insurance plans for this category of women.
Designing of products to suit clients’ needs
I am convinced that with recent developments, life insurers would take a look at this to ensure that in designing their products (with actuarial support) and placing clauses thereon, they would not be seen to be, as it were, ‘discriminating’ against pregnant women.
While that is being done, they must also bear in mind that ‘relaxing’ the rule beyond a certain limit could lead to what could be termed ‘accumulation of risk’; this can endanger the reserves of life insurers. Insurers must, therefore, be careful not to open the floodgates for anti-selection in this instance!
That notwithstanding, it is important to note that efforts being made to significantly reduce the risk factors in pregnancy-related areas are to relax the rule for women who find themselves in this category once they can afford to pay their premiums regularly. There is the need to balance the equation since the life expectancy rate of males is even lower than that of women, and what is standard practice is that women are expected to pay lower premiums than their male counterparts – gender plays a role in underwriting.
The way forward
The same way as people with alcoholic and smoking habits and others with dangerous occupations are loaded with premiums and having reduced sums assured, the same could be replicated for pregnant women so people like Joycelyn would not be denied ‘immediate’ access to life insurance cover.
With increased awareness on insurance and the need for the sector’s various lines of products, there is, therefore, the need to extend cover to all insurable working persons, including pregnant women without any restriction.
