The 2020 euthanasia referendum has passed meaning that the End of Life Choice Act 2019 takes full effect in November 2021. What does this new law mean for Life insurance policy holders? Let’s find out:
Life insurance policy holders:
People that are terminally ill and have a life insurance policy in place are likely to be covered by their providers if they choose assisted death, several insurance companies have confirmed this since the referendum results came out. However this will be reflected in the policy terms and conditions which may be different with each life insurance company. It was debated about a year ago whether or not companies would pay out if assisted dying became legal in New Zealand or not.
AIA representatives have said they could still settle claims if ACT MP David Seymour’s End of Life Choice Act became law, but others were yet to settle on their stance at that time.
Life insurance company Cigna said it would pay out if assisted dying became legal and policy holders took up the option. According to a recent article on Stuff Cigna chief executive Gail Costa said “Provided a policy holder who takes up the option of dying with assistance meets all terms and conditions, they will be entitled to claim.”
The End of Life Choice Act 2019 (Act)
The End of Life Choice Act 2019 (Act) makes it clear that assisted dying will not void an insurance contract and prevent a payment or other benefit being made to the estate of the person. Life insurance policies typically include an exclusion if a person dies as a result of suicide or other intentional self-injury within a certain period of time. If a person who dies as a result of assisted dying is for the purposes of any life insurance contract taken to have died from the terminal illness suffered, and as if assisted dying had not been provided.
Most insurance policies already include cover for terminal illnesses meaning insurers can pay a claim ‘early’ once an insured is eligible. Many insurance policies define a terminal illness as an illness that results in death within 12 months.
The Financial Services Council
The Financial Services Council, which represents 95 per cent of the life insurance market in New Zealand, said the issue of euthanasia has been challenging and complex.
Now that euthanasia has become legal in New Zealand the life insurance industry and individual insurance companies will have to work carefully to review their policies so that they are still fit for purpose. Each insurance company will have their own policy wordings and rules around how they deal with assisted death.
Contact us today if you wish to review your life insurance policy or get some life insurance put in place our advisers would love to help find the policy that works best for you.