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Advice on life insurance (including income protection insurance) can be valuable to consumers

Conversations about life insurance do not come up often in day to day conversation. It can be an awkward topic because it raises the very real possibility of terminal illness, accidents, injury and death.  These are not events people like to think about.

However, for advisers like us, it’s an easy topic to broach. Not only because talking about life insurance is what we do but because we understand the importance and value of life insurance and have seen firsthand the difference it makes in people’s lives.

The benefits aren’t just monetary, although anyone who has had a claim paid or knows someone who has, understands the enormous personal and financial benefits.  Have a look at the feedback from the many people we have helped to get claims paid here.

The list below is a general explanation of  benefits of life insurance when advice is obtained. Please note that this information is not specific for any one person whose needs and circumstances may differ. Consider getting personal advice relevant to your own situation and always read the Product Disclosure Statement issued by an insurer before considering applying for cover to see the terms of the policy.

Peace of mind

A key premise of life insurance advice is peace of mind.  Talking through ‘what if’ scenarios may be uncomfortable but facilitating peace of mind you is an outcome that’s worth some discomfort.  Peace of mind, though intangible, is a highly relatable concept.  Life insurance planning places emphasis on what you have and what can be lost. It’s important to link the value of life insurance to your key life values as part of any advice discussion.  Making that connection often leads to an ‘a-ha’ moment for many people.

Life satisfaction and well-being

The value of life insurance advice goes beyond peace of mind.  It can also contributes to a your well-being and life satisfaction.   This makes intuitive sense given a person who has engaged an adviser generally wants to know where they stand and take greater control of their future. This perception of greater control is known to enhance life satisfaction. Ironically, life insurance can give you a sense of control over the uncontrollable, which could make you feel better.  On the flipside, living with financial stress – which is a potential side effect of financial uncertainty and not holding adequate life insurance – often accompanies feelings of shame and low self-esteem.

Education

When looking to buy life insurance, people usually want to understand their financial position and risks, and how they can protect themselves and their families. Not only does an adviser recommend the most appropriate strategy and products based on a client’s personal situation, needs, objectives and budget but they also explain their recommendations.  Advisers educate clients about why they are recommending specific types and levels of cover so they can make smart, informed decisions. The best outcome is one where clients feel they are getting value for the cover being bought in relation to the risk they face.

The right type and level of insurance

Clients who seek advice tend to hold adequate protection because their adviser has assessed their personal needs and objectives; reviewed any existing insurances; and made suitable recommendations taking into account their goals, risk profile and budget. For the majority of workers who automatically receive a standard amount cover through their superannuation fund, they only have cover for a small percentage of their needs, according to Rice Warner Actuaries.  People are often surprised to learn the shortfall between the cover they have and the cover they need, not to mention the benefits of holding some insurance outside their super fund.

The right policy

There are a number of retail insurers in the market and the full range of products they offer can be overwhelming. Advisers can add significant value by using their knowledge and experience of which insurers are easy to deal with and quick to pay claims to help clients select the most appropriate solution. Once a client has decided to purchase life insurance, an adviser will help them complete the application process and prepare them for the risk assessment process.  In some cases, an insurer will request additional information or request a medical assessment.  Once an application has been assessed, an insurer will make a decision on whether a policy has been accepted and on what the terms. Depending on a client’s health and medical history, policy loadings and exclusions may apply. For clients who are not completely happy with their policy terms or feel misunderstood, an adviser can liaise with the insurer on their behalf to ensure they fully understand the situation and push for improved terms.

Confidence at claim time

Lodging and managing a claim is a key part of the advice process and central to the advice proposition. A major review by the corporate regulator found that retail (individual) life insurance claims, including TPD, trauma and income protection, are declined less when an adviser is involved in the process compared to dealing directly with an insurer. This is a critical fact that should reassure clients and reinforce the value of advice.  Clients of Experien Insurance Services can rest assured that their adviser will be there for them if, and when, they need to make a claim. They should be confident that any claim will be managed with compassion and in a timely way.