The comments by Suggars & Associates adviser Meike Suggars back up recent Zurich research which show Australians are ‘mis-informed’ about life insurance – and are either uninsured or ‘mis-insured’ as a result.
Ms Suggars said her clients are often misled to believe that the life insurance in their super fund will pay them in the event of illness.
“I think that’s because often a superannuation insurance statement will say that it includes terminal illness,” Ms Suggars said.
“But there is no further explanation in the statement as to what that means,” she said – adding that semantics and terminology are often at the heart of the confusion.
“It does worry me that the advertising you see on TV with no medical and no forms is misunderstood,” said Ms Suggars.
“The terminology used has a different meaning to the way those terms are used in ordinary language. People don’t understand the ins and outs of pre-existing conditions,” she said.
Ms Suggars said her clients usually need an example to help them understand what different policies will cover – such as how they might be covered if they had breast cancer.
“I think sometimes terminology could be a little bit clearer,” she said.
Zurich’s research proves how valuable life insurance advice is, Ms Suggars said – adding that by getting the right advice people will avoid being misinformed and therefore avoid underinsurance.
“We have a massive problem with underinsurance that is closely held with the idea of misinsurance where people have insurance of some kind, they just don’t understand what it does for them,” she said.
“That results in serious underinsurance because they think they are covered for things that they are not,” she said.
While i agree there is a deal of improvement needed in insurance education and marketing, I think the needed ‘semantics’ and terminology clarity needs to firstly occur with the commentator.
To my knowledge the sort of insurance she refers to that is generally spruked in 30sec ads on daytime and late night TV are from insurance brands owned or underwritten by direct insurers themselves, not super funds.
Lets nail it now.
All those direct life insurance ads saturating daytime TV must be a breach of the Trade Practices Act. A reasonable person will be deceived by those ads into believing they have full cover, tantalized by the phrase “no medicals or tests”
No advice sales must also be in breach of Best interests
When will the ACCC and ASIC exercise their powers and protect consumers.