Survey fails to account for claims: AFA
AFA chief executive Brad Fox has spoken out against a recent life insurer survey highlighting positive customer feedback to direct life insurance, saying the study doesn’t capture claims outcomes.
Last month, Risk Adviser reported on a Roy Morgan survey that found purchasing insurance through a direct channel resulted in higher satisfaction from the customer than if purchased through other channels such as an adviser.
Mr Fox said the survey failed to highlight the full picture, citing poor claim outcomes of direct life insurance. He called for all life insurance to be underwritten at application time to ensure a better claims experience for consumers.
“It is absolutely clear that the best way to reduce the risk of a policy not paying out at claim time is to see a financial adviser to arrange your life insurance needs,” Mr Fox said in a statement.
“It will take longer to put the insurance in place because it will be carefully underwritten in line with your medical and family history before it is offered to you. This gives you greater certainty that you are covered if you have a claim.”
Mr Fox added that consumers don’t have the same certainty with buying life insurance directly because these policies are not usually underwritten until the claim is lodged.
“At claim time, if a direct insurer determines you had health issues back when you purchased the policy or even in the years before, they may only refund the premiums and not pay out,” he said.
“We think that is unconscionable.”
What is the value of an adviser?
A new report has dived into the value of advisers and found that they deliver va...
Expect industry overhaul: FPA
Financial planning is set to have a revamp, the Financial Planning Association o...
Industry needs to speak the language of women
The adviser industry still has work to do in finding a way to speak the language...