ASIC Review of Direct Life insurance – A Welcome Development
ASIC recently published two reports focusing on Direct Life Insurance. One of these outlined findings from their own review of direct insurance, and the other covered consumer research findings into Direct Life Insurance.
These ASIC reports are very critical of the Direct Life industry and some of the key findings were as follows:
- Pressure selling techniques often being used by some of these insurers,
- Many of these insurers having high lapse and cancellation rates,
- There were examples of poor claims outcomes in some circumstances which are the result of products not being fully underwritten,
- There were often inadequate explanation or clarity provided on the key product features, and
- In some instances low value products were being sold to clients who included accidental death cover.
As a result of these findings, ASIC has strongly stated that they will:
- Restrict outbound selling and,
- Intervene if the Direct Life industry continues to sell low value accidental death cover without full and clear explanation of how this cover works.
These ASIC reports are a further wake up call for the Life Insurance industry overall.
Life insurance is about protecting Australians with products they can rely on, not aggressively selling products that don’t offer true value. It was particularly disappointing to see that 66% of the research respondents did not have a clear understanding of the fundamental workings of their Direct Life insurance covers and in particular the ‘built in’ exclusions which were included in their policies.
We are very proud at NobleOak to provide ‘fully underwritten’ Life insurance cover at a lower cost and with personal service. Our underwriting process includes asking each of our clients about their health history, occupation and also some basic lifestyle questions during the application process.
We will also obtain medical tests and possibly medical records before providing cover so we can tailor the terms specifically to your personal circumstances. This process takes a little longer than cover provided by the other direct insurers who do not follow the same process as we do, however, what we do is provide all our clients with greater certainty at claim time.
As a quality Life insurer with a very long history in Australia, we have a social license and responsibility to look after our customers and their families and we take this very seriously.
We don’t engage in outbound selling and nor do we sell accidental death products. Our lapse rates are significantly lower than industry average which reflects the quality of our products and our very competitive (lower) premium rates.
Also and very importantly, our claims record is exceptional.
NobleOak delivers Life insurance protection the way it should be and we will continue to improve in every way we can to deliver on our responsibilities and provide peace of mind for all our customers.