Patricia Curtin: Risk advice in action

Sound financial advice should account for both wealth creation and wealth protection measures, but many Australians who have a financial planner remain underinsured.

Asteron national claims manager Anthony Vriens says insurance products should be considered a critical component of a client’s financial affairs and policies carefully selected to ensure the client suffers no ongoing losses if they need to make a claim.

“When an adviser writes a policy, what they try to do is match as closely as possible the client’s financial circumstances both before and after the claims process,” he says.

Patricia Curtin, Asteron head of sales and marketing, says at the time of sale, advisers need to make it clear to the client how the product will meet their needs.

“It’s really being clear that the policy features benefit the client and you’ve clearly demonstrated that up-front so that at the time of claim there is no misunderstanding of what the client can expect and there are no issues from a claim process point of view,” she says.

Client circumstances vary dramatically and the issues that must be addressed when selecting an insurance product will be unique to each case.

Vriens says products such as trauma insurance, which provides cover for critical events that will have a major impact on the client’s life, may be appropriate for some.

A major illness or accident will often result in increased medical bills and periods of time where the client cannot work to their full potential.

“It’s nice at that point in time to have a lump sum payment so you can cover those things,” he says.

Self-employed people should consider both income protection insurance and business expenses insurance, he says, adding that these policies must be reviewed regularly to ensure the level of insurance is correct.

He explains that income protection insurance will replace the client’s personal income, while business expenses will allow the business to keep operating while the owner is sick.

Curtin says self-employed people also need to be guaranteed insurability so that no matter how many times they make a claim, the policy can’t be cancelled.

She says advisers should consider the client’s entire family when advising on insurance products, rather than simply insuring the breadwinner.

“Generally there’s three key components to a family, the husband, the wife and the children, and we should be looking at that as a package and how we insure the family rather than just one individual. If you lose a mum, the impact of that from a financial point of view is just extraordinary on a family, and yet we often under-insure the home-maker,” she says.