Rob recently received a nice email from his health fund. It was an offer to take out life insurance through an association that company has with a well-known life company.
Out of interest he obtained a quote and showed it to Tim to see if it was competitive. Within the firm, we have access to a research program that can list the premiums for all of the larger providers within the Australian market, so Tim was able to quickly obtain a list of 11 companies offering comparable policies. The one being offered to Rob through the recommended online broker had the second highest premium!
This highlights the defectiveness of the current system of advice being provided in Australia. Here is a health fund, with little or no expertise in life insurance, taking advantage of its long-standing members’ goodwill to offer them a very limited yet expensive policy. No statement of advice required, in fact no advice being given; no justification of the quantum to be insured; no discussion of other forms of insurance that may be applicable; and no adviser ensuring that all questions regarding health are answered in detail to ensure that any cover placed will be effective.
At FB Wealth Management, those of you who have endured the underwriting process know full well that it is extensive, time-consuming and often frustrating. However, at the conclusion of the process you will have the optimum cover based on your individual needs and budget and you will also have been provided with a detailed explanation in writing to justify the recommendations that have been made. Furthermore, you will have been assisted and encouraged to actually implement the insurance. In the case of the health fund in question, the entire process is left up to you and yet the premium is higher?
Our other issue is what will happen at claim time? Again, if Rob chose to use the cover being offered, it would be up to his beneficiaries to deal directly with the insurance company and the outcome of the claim is unknown due to the mediocre application process potentially leaving wriggle-room for the insurer.
While we hope our clients never need to make a claim, meaning they live long and healthy lives, we know unfortunately that this is not the situation for many. The value of having quality policies in place that you can feel confident will be honoured at time of claim, coupled with the experience of a caring team to assist you in handling claims is priceless.