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Life Insurance

Quality Over Speed More Important With Life Insurance

20 Feb 2019

Life Insurance by Life Stage

The choices you make today can impact your long-term health, wealth and happiness. Understand the important role Life Insurance can play in key life events.

Independent research commissioned by NobleOak Life Limited (NobleOak) found that 75.4% of Australians are confident in purchasing Life Insurance or Income Protection online without a financial adviser.

Further, the research revealed that 71.7% of respondents believe there is enough information online to help them understand how much cover they need. If they had a choice between using a financial adviser or using an online assessment calculator 61.8% would choose a calculator with 50.1% agreeing it’s better to do a full health assessment at the time they apply.

These results are not that surprising as over the past three years through our annual surveys we have seen a shift in preference by consumers to buy online and do a full assessment when applying for cover.

As an insurer that strongly believes in the benefits of fully underwritten cover, these results correlate with an increased interest by consumers in getting a quote for cover and completing a health assessment at the same time.

The survey also gave some valuable insights into why people feel the way they do. Among those who believed a full health assessment was better, 44% agreed it would be faster, 41.3% said they would get tailored cover and 43.1% said there would be no surprises at claim time.

People want to know they’ll be covered at claim time, without any hassles, and there seems to be a good understanding that it’s worth spending more time up-front to make sure your insurer knows all relevant information about you.

This is because healthy people may be able to reduce their premiums by disclosing their medical history – effectively ensuring they’re not paying more for other people’s health risks.

The Rice Warner “Underinsurance in Australia 2017” report reveals that the underinsurance gap remains significant for Australia’s working age population. It also shows that for those who have life cover, the median cover level is estimated to be approximately $143,500, which is only twice the median household. This may be insufficient to cover a family’s financial commitments in the event of death or injury of the main income earner.

Tips to ensuring you’re not underinsured

If you already have Life insurance or are thinking about taking out cover you need to do your homework. It can be easy to buy cover because it’s cheap, but this doesn’t mean it’s the best Life Insurance for your particular circumstances.

There are a lot of resources such as online calculators available to help you work out what type and level of cover you need.

Many people think that if they have Life insurance inside their super, they’re adequately covered. This is often not the case.

You should also remember that you can’t get Trauma cover inside your super. Also known as critical illness insurance, trauma cover provides a lump sum when you’re injured or contract a serious illness such as cancer, heart attack or stroke.

Ask yourself, is your cover adequate enough to provide you with the same standard of living if you had to make a claim? If the answer is ‘No’, then think about topping up your cover outside super. Cover held outside super may offer more opportunity to tailor levels and types of cover to suit your individual needs.

Review your cover annually. Whilst it’s easy to ‘set and forget’ and automatically renew your cover each year, you should take the time to review it to make sure it still meets your needs, particularly if your circumstances have changed such as getting married or buying a new home.

Lastly, read the Product Disclosure Statement (PDS) to make sure you know what you are, and are not, covered for. Most direct policies that don’t include many health questions when you apply often have pre-existing clauses that may result in your claim being delayed or even declined.

NobleOak has developed an online Life Insurance Calculator designed to help people determine what level of cover they need – without having to pay for financial advice.

The Life Insurance Calculator takes about 5-10 minutes to complete and is free. It covers Life Insurance, TPD, Trauma and Income Protection and produces a personalised report people can then use to get a quote.

Research conducted by Pureprofile in December 2018 with 1,043 Australian respondents.
Rice Warner Underinsurance in Australia 2017

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