Financial planners must highlight claim-time help

Key differences between group and retail risk insurance arrangements make it imperative that financial planners sell not only the value of their initial advice but the importance of their assistance at claim time, according to expert risk consultant, Col Fullagar.

Fullagar has driven home both the value of advice and the value of follow-up assistance in the event of a claim in a column in this week's Money Management in which he actively examines the circumstances of a client who wanted advice regarding a group insurance product with a premium of $400 and a retail product with a premium of $1,200.

Utilising the real life experience of the client, Fullagar found a range of key differences between the group and retail products not only go some way to justifying the higher retail premium but also highlights the need for people to be appropriately advised.

"I did not set out to determine which product was better. What I set out to do was determine to what degree the client needed to be appropriately informed," he said.

Fullagar said what became clear was clients needed to be assisted in understanding what each product delivered in terms of inclusions and exclusions, and what might be entailed in event of making a claim.

"In the end, I believe it is the client's ability to understand what they are getting and what it involves that is more important than the level of the premium he or she ultimately pays," he said.

"There would certainly be instances where, as a client, I would want the assistance and commitment of an experienced planner in dealing with the insurance company, rather than to be relying on a superannuation fund trustee," Fullagar said.

"When a claim goes pear-shaped, that's when you need the right advice and the right assistance," he said.