Often a contentious issue with ‘having insurance’ being a need rather than a want and with banks, insurance companies and the internet all vying for your business – not to mention some supermarkets and other industries getting in on the act. This will inevitably lead to confusion, a lack of good advice and weak products.
More often than not I come across potential clients who have little or no idea what kinds of insurance are available to them or how they work – and all too often who have insurance which they do not understand and their monthly direct debit being the only thing that connects them with the insurance provider.
Many people get little advice – or simply get sold insurance by their bank which is often not explained properly, or a thorough needs analysis being missed in the process altogether. This is simply not good enough… ‘Would you like fries with that’ is the phrase that springs to mind!
There are many components to insurance and a ‘one size fits all’ approach hardly fits the meaningful advice model.
The FMA today expects the adviser to provide a six step process – which includes a thorough needs analysis that explores all aspects of a person, business or family situation to ensure the insurance provided is ‘fit for purpose’. Many people that I speak with have rarely thought about or had a conversation around what matters in the event something should happen to their partner or spouse, let alone a realisation of the realities of a death or critical illness striking them or their loved ones. After all, isn’t this why we have insurance in the first place?
Navigating your way around the minefield that is the subject of insurance can be a nightmare for many – and as there are 9 insurance providers that I can tap into, it can be an interesting process for me as well. Then there are the many different contracts covering life, critical illness, mortgage or income protection, business cover and then last, but not least, medical insurance. And, each insurer has their own policy wordings to understand. Minefield indeed!!
Unfortunately, there are a great deal of people who will opt for what they believe to be the easy options and buy their insurances through their bank, a call centre or on the internet. None of these, in my opinion, offers a quality 6 step process or takes into account the nuances and variations in the policies available on the market today. A bank will simply sell their product – often with much reduced cover and wordings that are confusing to follow. They will say they are ‘cheaper’ – but compared to what? A client recently went to their bank as they said they would offer her cheaper insurances only for her to discover, in order to do so, they reduced her levels of cover considerably.
And then there are claims – which is why you have insurance in the first place, right?! If you buy your policy through the internet or the bank, who will champion your cause and do all the work around getting your claim paid? Who will argue your case when your claim is denied because of ‘non disclosure’… ?
Which brings me to the application process itself – are you clear in your application, do you answer all the questions fully and truthfully, did you mention the in-growing toenail that you had removed when you were 15 years of age? It may seem semantic, however every little thing must be declared in order to be assured a claim in the future will not be subject to a non-disclosure. When you went to your doctor and said “I have been a little depressed lately” it was noted in your records – and whether you took medication or not, could cause all sorts of issues further down track. This is where an insurance adviser is crucial in ensuring that your application is full and complete and will pay out at claim time, and will navigate those potential exclusions and loadings for you.
Then we come to amounts of cover. Most, if not all of my clients really have no idea – I was once asked by a potential client for $1 million dollars of cover. When I asked why that particular amount, they really had no clue – and once we had gone through a thorough needs analysis process we agreed that he really needed $1.6million of cover!
Would you really know? Is it just a matter of simply covering the mortgage? What would happen if you were unable to work for an extended period of time? Or were never able to work again? How long before you would be able to go back to work if your partner or spouse were to die? (Statistics show us that 33% of people who have no insurance had to move home due to financial pressure and 47% were struggling). What would you do if one of your children was sick and you wanted to be with them in hospital? There are many situations that could happen – most probably won’t, but what happens if something traumatic does occur and you just have not got enough or the right cover in place? In most cases, there is little or no warning that something is seriously wrong – so financial pressures on top of the stress of a death or critical illness can be overwhelming.
A good insurance adviser will not simply ‘sell you’ a product but will take the time to truly understand your situation and help to educate you in the varieties of insurances available and what would be relevant to your circumstances. They will also navigate the complexities of insurance companies and policies to ensure you have what fits and what you need for you and your business or family. The advice process is thorough and is all about you and your specific situation – there are no short cuts when it comes to protecting what is important to you and those that you love.
If you have any questions around your cover or around the policies you currently have, I am happy to give you a no-obligation review at no charge. Simply give me a call and we can arrange a time that suits you to meet over a coffee and discuss what is important to you and why.
021 634 451