Anand Thomas, MLC Life Insurance chief customer officer of bancassurance, digital & direct, told ifa that its decision to expand the distribution of its NAB Essential Life product via NAB’s 760 branches was about giving customers the choice in deciding what’s appropriate for them.
“Some customers might need to go to a financial planner and get more holistic protection, but some customers … just want access to the security of having life protection in a quick and easy way,” Mr Thomas said.
“When you look at the trends that are happening all around the world, in terms of digitising and so forth, customers are becoming comfortable with operating in that channel, and their expectations of wanting things being done in a simpler way is improving.
“It’s all about enabling that distribution channel to provide customers with that choice.”
As for how direct life distribution would work alongside MLC’s financial advice network, Mr Thomas said the initial decision would come from the customer before meeting up with an adviser.
“The banker would ask the customer whether they have a need to have life insurance,” he said.
“If the customer says yes, then we provide options to the customer. Would they like to make time to meet with a financial planner to go through a needs-based analysis and get a fully underwritten insurance product?”
MLC said in a statement yesterday NAB Essential Life will be available online, over the phone and in NAB branches.
Customers will be able to purchase the cover through “an easy and speedy application process without the need to consult a financial adviser or planner”, the statement said.
Maybe this is now a sign of the times, where institutional life companies (TAL incl), offer the direct line of insurance. Commercially for them it is a strategic move, no commissions paid, higher premium quoted (from the example on this stream) therefore a win for them.
However, the proof will be at time of claim where the application will be re-underwritten and then assessed.
The point made Annonymous is that PDS will not be read, which in the majority is true, but clients need to be aware that they are entering into a contract… Who signs a contract without reading it? THIS is where the adviser is invaluable, not only do we take them through the PDS but the advice is re-instated in the SoA.
It despairs me the way our industry is going.
I currently have a client who is TPD and on permanent workcover payments. A large Bank sold him and his spouse a Mortgage protection policy that covers him for Life & TPD (but not pre-existing conditions, and oh yeah – he has to be working to become TPD which involves ceasing work). Cost to them $250 per month. When I explained he would be unlikely to be able to claim on the policy they were horrified. Choice for the consumer huh?
They’re right. It is about choice. The choice of shareholder returns above the customer’s best interest.
This is actually not about customer choice. If you take our a life insurance through NAB essential as a 45 year old non smoker for $500,000 you will pay $85.85 per month. It will be easy to get because its basic underwriting with a high number of policy exclusions for claiming.
If you took the same policy out with MLC retail through a risk adviser getting upfront commission the same customer would pay $39.43 per month (LESS THAN HALF OF THE COST!!) The case would be properly underwritten and would not have the same exclusions when claiming. In addition the customer would have the chance to be advised on other important insurances (e.g. IP, Trauma or TPD)
Of course any customer in their right mind would choose the risk adviser.
So why is this not about customer choice?
Simple, because thanks to the LIF the risk adviser can no longer afford to give this advice for free in the future.
So this is not about customer choice, its about the FSC and insurance companies blatant greed and abuse via the LIF to stitch up both customers and advisers.
It is about the FSC members finding a way to charge more and pay less claims in the future.
“Choice” is not the same as “Informed choice”. Customers who make choices based on marketing claims and a quick and easy application process will never read the insidious terms and conditions in the PDS. They will only find out they purchased junk insurance when their claim is denied.
Life and disability insurance is complex and involves potentially large sums of money. It should only ever be purchased in conjunction with professional advice. LIF is all about reducing affordable access to that advice so consumers buy more junk insurance.
And in a few years when they have a trauma claim and realise that their “life” insurance doesn’t cover them??? “But no one told me I could be covered if I get cancer…..”
Not a huge surprise. Only a matter of time before Nippon would start cracking the whip! This is why they bought 80% of MLC’s insurance business- access to the Nab customer base. It would pay the execs of the major instos pursuing this to be mindful of the recent ASIC report into Life insurance which revealed that insurance claims have been rejected more often when the cover was sold without advice. If we are truly to get away from these outcomes insurance companies need to embrace advice and not walk away from it. The “smell” of moving further into the non-advised space is that there will be an improvement in the claims experience but a backwards step in addressing our chronic under insurance problem in this country.
it should be noted to the customer that they will pay 150% for purchasing there insurance this way and also that they may not get paid at time of claim for existing illnesses ????? where is the FSC on there code hhhmmm sleeping at the wheel or maybe Odwyer was instrumental on this as she has to make sure the LIF legislation had been submitted so the large donation cheque NAB made to the liberal party for there girl who was an ex employee cleared.!! Also it was the reason for the sale of MLC insurance to Nippon, the deal would not have happened before the LIF legislation was guaranteed, and there profit for any year had just been doubled by the Clawback and commission reduction.????? AFA and FPA wakeup
In my experience “security” of life cover and “quick and easy” are usually mutually exclusive
What a load of contemptible clap trap
The big instos continue to show contempt for financial planning. It is all about flogging products.