Insurance advice vital to avoid dangers
Consumers who seek professional financial advice before getting life insurance have more stability and certainty, while their premiums have not increased as much as the superannuation industry.
Such is the finding of the CANSTAR 2015 Life Insurance Star Ratings report, which said that while consumers could buy insurance without advice, they would be taking a risk as advisers would be aware of industry nuances that could help consumers.
"Choosing the cheapest policy is a false economy if you can't make a successful claim, as price will be long forgotten after a bad claims experience," the report said.
"Good advisers will be able to look at different companies and their approach to pricing over a really long period of time."
CANSTAR Wealth Manager, Paul O'Connor, said that while many workers had some amount of insurance cover within their super fund, this was often a minimal default level, which was insufficient.
"You can change jobs, change superannuation funds, but with advised life insurance, once the cover is in place, it can't be taken away," he said.
On premium increases with the super industry, O'Connor said super funds had seen steep price increases over the past 18 months, especially in disability cover.
"There are a number of factors contributing to this; factors that haven't affected the advised life industry. Essentially though it means that advised life insurance customers are benefitting from both certainty of cover and relative certainty of cost," he said.
AUTHOR
Malavika Santhebennur
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