Know what you’re buying
Life insurance is marketed a lot these days. Daytime TV is flooded with ads, often promoting over-the-phone, easy-to-access cover that doesn’t require a health check or blood test.
These types of policies sold directly can be very convenient. However they often have limited-underwriting. This means the insurer doesn’t ask many questions at the time you apply nor do you have to provide a health report from your doctor or a blood test.
Sounds easy, right? Normally it is. But there are some drawbacks to this approach.
When it comes to making a claim, you (or your family member) may need to answer more detailed health questions and supply a report from your doctor. This can slow the process down at a time when you may be emotionally distressed. Sometimes the claim may be declined due to adverse health factors or pre-existing conditions being discovered at the time of claiming.
Cover bought through your superannuation funds is also more likely to have limited- or no-underwriting.
According to an article from IFA, while limited-underwritten insurance is convenient and here to stay, it can often be 120% to 160% more expensive than policies that are fully underwritten, which reflects the higher risk involved.
Policies available through financial advisers and some direct insurers like NobleOak, are fully-underwritten. While you need to invest more time providing detailed information when you apply, the longer-term benefits include higher quality cover and more certainty when you claim.
Buying through a financial adviser also requires a multipage statement of advice (SOA) that people often don’t read or understand.
To help people avoid making costly mistakes, NobleOak has developed ‘A Guide to Life Insurance’ that looks at the important things people need to know about when taking out Life insurance or upgrading their cover – all in one place. It’s written clearly and simply and covers topics such as:
1. the best times to think about taking out cover e.g. marriage, starting a family,
2. the different types of cover available i.e. Life insurance, Income Protection, Trauma and TPD cover,
3. what the options are for buying cover, either direct, in your super or through an adviser,
4. how much it costs, and
5. making a claim.
A Guide to Life Insurance is available to download free from our website.
Avoid surprises at claim time
NobleOak provides the best of both worlds offering cover direct to consumers that is fully underwritten at the time of application giving more certainty at claim time – and at a lower cost than cover bought direct or through an adviser.
Please note that the information we provide is not advice but general information only.