Educated, self-directed approach urged on life/risk
People need to be educated to become more self-directed on the purchase of life insurance, according to new research released by NobleOak Insurance.
According to the research, conducted for NobleOak by market research firm, PureProfile, people are not taking out life insurance because they don't appropriately understand the product and because they think to obtain comprehensive cover they must go through a financial adviser.
According to the research, respondents' greatest fears involved getting seriously ill so they had to stop work for a period of time, or dying, either by illness or by accident.
NobleOak chief executive, Anthony Brown, said that many of the things people were most concerned about could be covered by Income Protection, Trauma or TPD (Total and Permanent Disability) covers.
However he noted that the take-up of these types of covers was still lagging behind car, house, contents and general health insurance and suggested it was time to make it easier for people to understand the types of covers they need and products that would be suitable to them.
"According to the research, people also struggled to see the true value in life insurance because they often don't understand the product," Brown said.
"They don't see themselves as being involved in the purchase process, because for comprehensive life insurance they have to go through a financial adviser. This is compared to car/house/content insurance where they can touch the physical thing they are insuring and they can buy the insurance themselves without an intermediary."
Brown said it was clear from the research that people needed a comprehensive and self-directed source of information to help them consider their life insurance needs and which provided them with an indication of what type of insurance and what level of cover would meet their needs and this needed to be at minimal or no cost.
"There is an education process that needs to be undertaken so people understand that there are alternatives to going through an adviser to buy insurance," he said.
"If they have the right tools to help them understand their insurance needs they can buy the correct amount of insurance directly from a range of providers that offer products to meet their needs and matches their cost expectations."
Recommended for you
With Sanlam Private Wealth coming under ASIC pressure regarding the number of responsible managers in its business, law firm Holley Nethercote explores what the role entails and how to stay on the right side of the law.
Insignia Financial has granted CC Capital access to select company information in the hope of securing an improved offer from the private equity firm.
Recruitment agency Robert Walters has revealed the expected salary ranges for Australian financial advisers in 2025, with one particular state seeing a decline.
As global PE firms scope out the Australian wealth management industry, Finura predicts which other local names may potentially receive a takeover offer this year.
