Would I be better off buying insurance without an adviser?
At an early stage in considering your Life and Health Insurance you’ll find yourself asking this question. Would it be cheaper to buy online or through my bank and cut out the cost of an adviser? What difference does an adviser really make anyway?
There are several parts to the answer. A good adviser will;
give you expert advice tailored to your specific circumstances – how you can structure each policy by type or level of cover to protect yourself and you loved ones in the ways that you want to be protected
advise you on the insurance provider you would be better off using from a pool of options, ensuring that the insurance product you get is competitive and value for money in the current market
ensure you have your cover reviewed annually to check it is still commensurate to your needs, and reduce or increase that cover when appropriate
act on your behalf at the time of a claim
Advice
At banks and online providers advice is provided in a limited capacity, if at all. The biggest issue I see when meeting new clients is they believe that their current insurance product covers them in ways it does not, or not to the extent they believed it did.
Anyone who has seen the terms and conditions that go with an insurance product realises they are complicated. You obviously need to read all the terms through yourself - but it is valuable to receive advice from someone who deals with those products in detail on a daily basis, who can explain things, point out differences, and make sure you are appropriately covering your risks.
Insurance Providers
When receiving advice you want to know that this advice is not limited to choosing between only one or two companies. As we tell our clients there is no one provider who is 100% right for every client and therefore it is important your adviser has relationships with all major providers and understands all of their different products.
Typically banks only offer their own products. Buying online will expose you to different providers, however their comparisons are done on price and don’t differentiate between what different policies specifically cover, or explain their policy wordings, terms and conditions.
In comparison I have agencies with eight different Life Insurance providers and five different Health Insurance providers, allowing me to provide the best product from a large range of options to my clients.
This can be a momentous difference. The best value for money life insurance product for a business owner with a high risk leisure activity is not the same as the best value for money product for a young parent with a diagnosed heart condition. Different products have different weightings for various risks, different levels of pay-outs for different potential claims, and therefore suit different risk profiles.
Reviews
Too often I meet new clients who have had the same cover in place for more than five years and it has never been reviewed. Reviewing involves checking the appropriateness of cover hasn’t changed. Do you still have the same number of dependents? Do you have additional assets or debts? Have you grown your business or increased the number of shareholders? All of these things change the amount of risk you need to cover.
Reviewing your cover also means reviewing the types of products you have and benefit amounts will still result in your desired outcome at claim time. It means checking the quality of the policy wording of your product versus newer products (e.g. more generous terms may have been offered which would suit you better), and finally a review of the premium expense compared to the market. Reviews should be completed annually and at no cost to you.
Claims
This is where the ‘rubber hits the road’ and you discover whether your insurance does what you thought it would. Over many years in this industry I have managed and had paid out millions of dollars of Death, Trauma and Income Protection Claims for my clients. When you end up in the devastating situation of the death of a loved one, or a diagnosis of a serious illness, you want to be able to call your adviser and know the insurance claim will be on its way with no further stress to you and your family.
An adviser will manage the claim at the insurance company and help compile any outstanding requirements i.e. claim forms, medical info, financial info etc. Without an adviser, at the same time as managing the stressful situation, you will:
have to deal with the insurer directly, often involving numerous calls and emails
have to source and provide all outstanding documents yourself
have no one following the claim through the provider’s system for you ensuring it progresses smoothly
have no influential and knowledgeable person to lobby on your behalf if there is any query over your situation meeting requirements.
A difficult claim can take a lot of adviser time – none of which is billed to the client of course. You’re due that care at claim time because you chose to use an adviser. One particular claim I had took me more than forty hours of work to resolve but it made a huge difference to my client.
The importance of this job for me is in caring for people in stressful situations and this becomes clear at claim time when we can see that our hard work is a real help.
Insurance premiums are the same whether you use an adviser or buy direct so it costs no more to have an adviser like myself. However not all advisers are equal, as in any occupation or industry. It is worth getting a recommendation from someone who has been through a claim to find out how their adviser worked for them.
Here’s an example of What my Clients have to Say.