We all frequently see and hear insurance ads on TV and the radio.

‘Compare your policies, obtain a cheaper quote, quick online approval…’

Sure – the appeal can be enticing:

• sign up online
• avoid the hassle of questions and medical exams
• cheaper premiums, and
• instant coverage.

But do the insurance companies ever tell you how often the policies are honoured (or rather NOT paid out?) Do they tell you about the enormous and rigorous procedures you will have to undergo in the unfortunate event you or a family member will have to claim on these policies?

What are you signing up for in exchange for this convenience?

TV and radio ads are emotionally charged. “Protect your family from financial hardship” they say! They also highlight low costs and easy sign-ups, but often omit crucial details about claim payouts and the rigorous process involved in making a claim.

THE UNDERWRITING PROCESS
Why it matters
Authorised financial planners and risk insurance brokers don’t take shortcuts. They guide you through a thorough ‘underwriting’ process that includes medical exams, blood tests and detailed health history questions.

This ensures a higher likelihood of your claim being approved when you need it most.

CASE STUDY
The hidden cost of ‘easy’ insurance
Consider Andrew who bought a $500,000 life insurance policy online over a decade ago. At the time he was in a new relationship, considering marriage and starting a family.

He wanted to provide for his pending wife and future family in the event something happened to him, so he jumped online and purchased a life insurance policy to the value of $500,000.

He has been paying his premiums without fail over the years, even though his policy has increased every year as his age does. He thought he had everything ‘covered’.

Last year his best mate had a heart attack and unfortunately did not survive. When he heard about the challenges that his mate’s wife had to go through to claim on the insurance, he decided to check out his own policy.

He contacted the insurance company and, like his best friend’s wife, was shocked at their response.

Because Andrew did not carry out any medical examinations that one would normally undergo at the time of taking out the cover, in the event of his death his wife will need to do the following:

• Provide all medical records from 5 years prior to the policy being taken out (and three years prior to her knowing him).
• Track down every doctor he has been to before and after they met.
• Provide evidence that these records are accurate and there were no pre-existing conditions prior to his taking out the policy.

I don’t know about you, but can you accurately list all the doctors your partner has seen prior to your meeting and all their post conditions since you met?

I know my memory is not that good at the best of times with my own medical history, let alone someone else’s.

Andrew also reflected on how obscure some of the online questions were that were difficult to answer. For example one question was ‘Have you ever smoked?’

Most people in his generation pinched a cigarette or two from dad’s smoke drawer and had a puff or two in their early teens – but does that count?

If your answer is deemed to be dishonest or misleading then it leads to a case of the insurance company not having to pay out on the insurance.

The choice is yours
You can choose the cheap and easy route and leave your loved ones to navigate a complex claims process in your absence. Or you can invest time with qualified professionals to ensure your insurance is comprehensive
and reliable.

Don’t be fooled by the hype
As you know, we are passionate about protecting your financial wellbeing. It’s frustrating to see the distrust of insurance companies that often stems from policies not being honoured and paid out. In most cases, this is due
to a lack of due diligence and underwriting during the application process.

Remember, easy and cheap doesn’t always mean best.

TAKE ACTION TODAY
We encourage you to review your existing policies and understand their terms and conditions. If you need assistance, please reach out to us.

We understand that the cost of living is high and insurance may not be on your radar as being important. However, consider what your family may go through if they cannot claim on your insurance in the event of incredible misfortune.

We’re here to help you make informed decisions about your insurance needs and can refer you to our preferred insurance specialists.

Reach out if we can assist.