Real Insurance founder Richard Enthoven said in a statement that direct life insurance makes cover accessible to families who otherwise would be uncovered as “not all Australians can afford or need financial advice”.
He cited Roy Morgan data, which he said “shows that the channel used to purchase insurance has a strong correlation with satisfaction levels”.
“Given developments in technology, Australians are becoming increasingly confident about doing things themselves that they previously couldn’t do, like researching life insurance online and then purchasing it directly,” Mr Enthoven said.
According to Real Insurance’s Family Protection Survey, around 38 per cent of respondents said they don’t have any life insurance, while just over 22 per cent said they don’t feel confident that the insurance they have is enough for their needs.
In addition, around 40 per cent of respondents said they have not chosen caretakers for their children in the event of their death, while just over 56 per cent said they have not set a will.
The CoreData-conducted survey asked 1,000 Australian parents in April 2017 about the methods they use to protect their families.
Two hundred respondents were surveyed each from NSW, Victoria, Queensland and Western Australia, while the remaining 200 came from the remaining states and territories.
There has to be a middle ground between (1) Seeing a financial planner who provides a large SOA which no one ever reads, charges a fee (if they don’t currently they will be shortly) and the often painful underwriting process and (2) picking an ordinary product off the internet / morning TV. Unfortunately most people will take the “no worries up front option” because they don’t realise the complications that happen at claim time and on the basis that “all insurance is the same” the better products will be tarred with the same brush of not paying claims.
This of course assumes that the parties responsible for legislating financial advice in this country actually gave a rats about the industry and the people it can assist. Until this happens then he is right in that people will buy into their advertising and get direct insurance.
You’re right Scott, there needs to be a middle ground. The middle ground that would be best for consumers is professional financial advice that is not overburdened by excessive bureaucracy and regulation. The current regulatory environment for financial advisers has gone way too far, and is just pushing consumers into the arms of unregulated cowboys like junk insurers, “roboadvisers”, and real estate agents.
I am assisting a client with a Loan protection policy claim that was taken out at the same time they applied for a home loan with a top 4 bank. I wonder if they both were advised of the 3 exclusions at time of application that apply to the policy, given that the husband who passed away was an alcoholic and one of the exclusions was “”Alcohol”. Wife is a bit concerned. I think her only other alternative to me assisting is to “Lawyer Up”.
Hello FOS !!
What this guy above said please. ^ Well done
This would be disastrous for the majority of claims when they realise they weren’t insured correctly, covered for conditions they thought they were and have to deal with the underwriting/claims process on their own with no professional help.
He may be right about advice being unaffordable for many people. But that’s no excuse for peddling junk insurance to them.
How sad a situation this is when the legislators and providers create a situation that prevents those that need insurance the most now cant afford to get it and get stuck with poor advice and inferior products that will never get reviewed
Of course Mr Enthoven would say this. He’s obviously hoping to drive more people to his door, were they can be offered policies with little or no underwriting and where the client will only truly know whether they or their spouse/partner had cover is at claim time. At which point it’s obviously too late.
Direct insurance premiums are generally significantly higher than retail policies provided with advice. Clients seeking assistance from an adviser would end up with cheaper premiums, better quality policies and advice on appropriate sums insured and structuring, all for the cost of the premium paid.
Gee an Direct Life insurer saying there is a need for their own product, amazing news.
How about promote some real news IFA.
– Direct Life policies are often far more expensive than advised policies,
– Direct Life policies often have more restrictive definitions that limit the chance of a claim,
– They are not underwritten at application so people run a very significant risk of believing they have done the right thing to protect their family but will be devastated when the Direct Insurer won’t pay the claim due to pre existing conditions,
– There is no professional adviser to help fight the insurer to get a claim paid when these troubles arise.
It would seem the more the public are made aware of these con artist direct insurers, they certainly won’t be buying these rubbish policies.
Now that’s worthy news IFA.