Pregnancy and insurance
“What is good for the goose is good for the gander” – a popular adiom
The Scenario
Joycelyn is one of four female teachers at Abele Nursery School. She is two months pregnant. She has since been attending antenatal care. In August 2014, Precious Atombo, an insurance sales manager of Noko Life Insurance Company with her team, were in Joycelyn’s school to educate interested teachers on life insurance products and possibly make some sales.
Out of 15 teachers, nine including Joycelyn, expressed interest in purchasing a number of products ranging from investment policies through education to funeral policies after they were convinced by the sales team.
When it got to the turn of Joycelyn, 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 or postpone your cover until after seven months from now and then we can advise your bankers to effect the deductions.’’
Joycelyn was not happy with this ‘excuse’ from Precious and her team and ,therefore, wondered why 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 would 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 or not. There , however, a developing trend where some insurers have started taking out this question from their proposal forms and that is relieving to know.
Field Underwriting
Technically, once a female applicant indicates ‘Yes’ to this question then she stands the ‘risk’ of having her cover deferred / postponed or the agent would have to wait till after delivery before he or she (the agent) goes back to have her signed on. 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 were not being effected against the due dates indicated.
Similarly, an agent who mis-sells 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 passes on owing to complications related to labour or delivery resulting in what I would term “post claim underwriting”.
The Rate of Maternal Mortality
Maternal mortality has been with us since time immemorial but 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 have far advanced than here in sub-Saharan Africa. In the developed world where a woman's life time risk of dying during pregnancy and childbirth is 1 in every 3,700, the risk of maternal death is very high at an outrageous 1 in every 38 in sub-Saharan Africa!
To make matters more sophisticated, most insurance plans 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 close to that.
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 to include ectopic, hospitalisation benefits, among others which can be quite costly to Life Insurers.
Balancing the risk proportion
Joycelyn further questioned why Buchey, a male teacher in the School who drinks alcohol heavily, did not have his application deferred for a similar ‘offence’. This is because she believes Buchey is even more likely to die in a motor vehicle accident resulting from drunkenness or kidney-related complications due to his excessive intake of alcohol!
Does Joycelyn have a case?
Jocelyn’s arguments seem valid considering the fact that in contemporary times most pregnant women are taking the needed precautionary ante-natal measures in preparation towards delivery. Is it not a fact that more people die in mostly avoidable motor accidents and malaria than pregnancy-related complications?
Insurance business has become more dynamic, sophisticated, competitive and must be designed to suit clients’ needs. It is therefore a welcoming news to learn that some insurers are developing insurance policies that cover pregnancy complicated conditions.
What remains unclear is whether such insurers would not repudiate claims in the event of death of a pregnant mother within the life time of the policy.
I believe this can only happen if pregnancy is a clear exclusion on the policy. I do not believe that the business-oriented insurers we have in Ghana would want to use this at the claim stage in order to deny the claim. It is about time insurers made this clear to the insuring public to know what the policy terms and conditions were such that the issue of non-disclosure would not arise thereof in the event of a loss which sometimes results in insurers being accused of the practice of ‘post claim underwriting’.
The Perspective of The Millennium Development Goals 5
It is not for nothing that the World Health Organisation (WHO’s) working areas under the Millennium Development Goals (MDG) 5 that seeks to save the lives of women who are at risk of dying from complications during pregnancy and childbirth emphasizes:
•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 and 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!
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.
Increasing Insurance Demand and Maternal Care
In recent times and with intensive education, increasing numbers of women are now seeking good quality care during pregnancy and childbirth in health facilities and therefore it is important to note that efforts are being made to significantly reduce the risk factors in this area ,hence the need to relax the rule for women who find themselves in this category once they can afford to pay their premiums regularly.
The Way Forward
The same way as people with alcoholic and smoking habits 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.
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