Zurich beefs up Covid insurance to tackle vaccine hesitancy

Zurich wants to help alleviate Covid-19 vaccine hesitancy by introducing a lump sum benefit linked to rare side effects or death from approved vaccines.

Zurich or OnePath Life insured customers will be eligible for the new payment if they suffer a serious side effect from an approved Covid-19 vaccination. Picture: Rae Wilson

Zurich is taking steps to help alleviate Covid-19 vaccine hesitancy and anxiety in Australia, as it introduces a lump sum financial benefit linked to rare instances of severe side effects or death from approved vaccines.

Zurich Life & Investments and its subsidiary OnePath will on Friday announce the new vaccination protection for eligible life insurance policies, which comes at no extra cost to customers.

The bulk of local life insurance policies cover vaccination side effects or death, unless they have a specific exclusion. But Zurich is seeking to address vaccine hesitancy in the short term so customers or their beneficiaries can access an additional $50,000 one-off payment – on top of their death or total & permanent disability (TPD) benefit – if they die or are permanently disabled due to the vaccine.

Under the changes, which Zurich claims are an Australian first, income protection policyholders may also be eligible for payment during standard waiting periods, if they are hospitalised.

“It really is just trying to push the Australians that just have fear in the back of their mind to just overcome that hurdle,” Dr Sally Phillips, Zurich LiveWell’s chief product and proposition officer.

“We know that they‘re rare but we really want to encourage all Australians to get vaccinated and this is a way of … saying this is a meaningful amount that if something does happen there’s an additional booster payment that you can access fairly quickly and that could cover some of the financial needs.”

Dr Phillips, who originally qualified as a medical doctor before moving into insurance, said Zurich assessed overseas data and analysis from the Therapeutic Goods Administration ahead of formulating the new payment.

The data was showing uncommon, but serious side effects linked to vaccines, included thrombosis and thrombocytopenia, issues linked to the heart myocarditis and pericarditis, severe anaphylaxis and immune disorder Guillain-Barre syndrome.

Zurich is seeking to address vaccine hesitancy in the short term so customers or their beneficiaries can access an additional $50,000 one-off payment – on top of their death or total & permanent disability (TPD) benefit – if they die or are permanently disabled due to the vaccine.

“If anyone has a side effect that is going to lead them to TPD, unfortunately die or have disability income we definitely will be looking at those even if it’s not specifically defined within the policy document because there might be a new a complication that comes through,” Dr Phillips said.

When quizzed about the potential for very low incidence of payouts for the new benefit, she said: “We have modelled it on the fact that at that level we can price it as no cost (to the customer), in other words we can balance that risk of giving it for free but giving that additional boost for somebody just to get them over the line.

“The modelling is that we do still expect some claims to come through, even if it‘s one or two or three or however many claims that come through.”

While regulators have taken issue with insurance policies that don’t pay out many claims, Dr Phillips said the new vaccine payment was “an ex-gratia benefit” and not a separate insurance policy.

As of Wednesday, more than 20 million doses of Covid-19 vaccines had been administered in Australia. About 60.5 per cent of people aged over 16 have had at least one dose, with 36.4 per cent in the same category being fully vaccinated.

Business leaders have stepped up their calls for state and territory leaders to follow the national cabinet plan out of lockdowns, when vaccination rates reach 70 per cent and 80 per cent.

That comes as Queensland and Western Australia have splintered from other states on the reopening plan, as debate also occurs about how the Covid-19 delta variant affects children younger than 12.

“We are now seeing maybe in these next three months there might be a hurdle in just that last 20 to 30 per cent of Australians who may just have that fear in their mind. We are a risk company, insurance is around risk mitigation and risk measurement,” Dr Phillips said.

Therapeutic Goods Administration is continually monitoring the safety of vaccines and has said the most commonly reported side effects include injection-site reactions, and symptoms such as headache, muscle pain, fever and chills.

As at August 29, the TGA said there were 125 cases of TTS assessed as related to the AstraZeneca vaccine from about 9.6 million doses. Since then a further nine reports of blood clots and low blood platelets have been assessed as confirmed or probable.

The new Zurich vaccine payment is capped at $50,000 in Australia, and the insurer also has variations of the vaccination protection in Malaysia and Hong Kong.

The benefit is available until December 31, as long as the customer is insured when they are vaccinated, and death or disability must occur within 90 days of receiving the Covid-19 vaccination.

“It‘s a really important message coming from Zurich Australia that we’re strongly behind and support the government’s advice to get vaccinated,” Dr Phillips said.

Zurich’s head of group insurance Darren Wickham said: “We felt it was important to offer this additional Covid-19 vaccination coverage within our group insurance portfolio, as well as via our retail and direct lines, given that so many Australians access life insurance through their superannuation.”