Simplicity beats financial planner engagement, Canstar says
Do-it-yourself life insurance is becoming increasingly popular with Australians, which is largely attributed to the simplicity of buying so-called 'off the shelf' products rather than going through a financial planner, according to Canstar Cannex.
Furthermore, insurers are making insurance more accessible by introducing features including auto acceptance with pre-existing medical condition exclusions.
"Buying life insurance direct is an alternative to going through a planner of advisor; as such, it's an uncomplicated way of putting a life insurance policy into place straight away as the first step towards protecting assets," the researcher noted.
These comments came as Canstar Cannex came out with its annual direct life insurance star ratings, which compared policies from 19 providers.
Of those, Allianz, Medibank, and Real Insurance topped the list based on their suite of features covered, reasonable premium costs and ease of eligibility for the majority of consumers.
However, Canstar Cannex head of wealth management Stephen Mitchell did warn consumers about the risks of not engaging with a financial planner.
"You've got to remember that you are not being guided by a licensed financial planner, and so you have to compensate by looking very carefully at the exclusions before you sign up," Mitchell said.
"Direct life insurance is also a good quick-fix for someone who wants to put a policy into place straight away, but plans to review their complete asset protection and investment strategy with a licensed financial planner a bit later on," he added.
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