Life Insurance: Where would we be without it?

If you were thinking about taking out Life Insurance recently, you may have decided to put it off given some of the disturbing revelations about some Life Insurance companies through the Royal Commission.

But don’t be put off.

Over the past six months the Royal Commission has put the spotlight on issues where the key underlying problems have  been identified as poor processes, lack of adequate training of staff,  outdated products and also computer systems  to mention a few. In many cases, these problems had been identified and were in the process of being corrected by the Life Offices who have been involved in the hearings.

The role of Life Insurance in society and the economy

Life Insurance is a social responsibility, and operates in an ethical framework that is meant to benefit the wider society and business.

 Paying claims[i] is what all Life Insurers do. It is their primary purpose. In 2017 $9 Billion was paid out in life insurance claims with more than $26 million being paid daily and the number of claimants being 108,000. These payments are in addition to any government funding that people could rely on in the event of becoming sick or disabled, such as Medicare and the public hospital system and also social security benefits.

Without a strong Life Insurance industry these payments would not be made and Australian families would have to bear the cost of replacing lost income in  the event of death or disability of a loved one, or perhaps rely on family and friends to help out.

Without this wonderful Industry, the  alternative would be  a greater reliance on government, both state and federal, with a flow on impact of  increasing taxes.

Life Insurance is a cornerstone to the strength of the Financial Services Industry in Australia. The issues being raised within the Royal Commission will be addressed quickly and we will emerge much stronger as a result.

Even with a strong Life Insurance industry, there remains  a significant under insurance[ii] issue in Australia. This means that even with some level of insurance, there could still be  financial hardship for clients to deal with.

These findings show clearly that Australians need more Life Insurance rather than less.

The future is bright

The draft report from the Royal Commission is due out shortly. No doubt it will include a number of recommendations to improve outdated processes and systems, and internally focused cultures that have contributed to a breakdown in the social contract with customers.

At NobleOak we take this responsibility seriously and do things differently in order to honour that contract with our customers:

We offer quality cover at competitive premium rates direct over the phone without an adviser

-Our products are fully underwritten giving more certainty at claim time. We call it ‘No surprises cover’.

-Our claims record is exceptional.

-Our “customer first” strategy ensures the interests of our clients are always aligned with our business objectives.

Our 140 year heritage is linked back to the Ancient Order of Druids and their benevolent work in providing benefits and sick pay to their members. Their  central tenant was of ‘’integrity’’ which underpins our values of  Nobility, Simplicity, Adaptability and Delivery.

At NobleOak we look forward to the release of the final Royal Commission report and continuing to offer an alternative to the institutional Life insurers and most importantly, to helping our customers.

 

Sources:

[i] http://riskinfo.com.au/news/2017/06/06/life-insurance-claims-pass-9-billion-in-single-year/

[ii] https://www.ricewarner.com/life-insurance-adequacy/

 

Margaret Rochford

28 September 2018 - 5 minute read