Educated, self-directed approach urged on life/risk
People need to be educated to become more self-directed on the purchase of life insurance, according to new research released by NobleOak Insurance.
According to the research, conducted for NobleOak by market research firm, PureProfile, people are not taking out life insurance because they don't appropriately understand the product and because they think to obtain comprehensive cover they must go through a financial adviser.
According to the research, respondents' greatest fears involved getting seriously ill so they had to stop work for a period of time, or dying, either by illness or by accident.
NobleOak chief executive, Anthony Brown, said that many of the things people were most concerned about could be covered by Income Protection, Trauma or TPD (Total and Permanent Disability) covers.
However he noted that the take-up of these types of covers was still lagging behind car, house, contents and general health insurance and suggested it was time to make it easier for people to understand the types of covers they need and products that would be suitable to them.
"According to the research, people also struggled to see the true value in life insurance because they often don't understand the product," Brown said.
"They don't see themselves as being involved in the purchase process, because for comprehensive life insurance they have to go through a financial adviser. This is compared to car/house/content insurance where they can touch the physical thing they are insuring and they can buy the insurance themselves without an intermediary."
Brown said it was clear from the research that people needed a comprehensive and self-directed source of information to help them consider their life insurance needs and which provided them with an indication of what type of insurance and what level of cover would meet their needs and this needed to be at minimal or no cost.
"There is an education process that needs to be undertaken so people understand that there are alternatives to going through an adviser to buy insurance," he said.
"If they have the right tools to help them understand their insurance needs they can buy the correct amount of insurance directly from a range of providers that offer products to meet their needs and matches their cost expectations."
Recommended for you
A NSW-based adviser has been banned from providing financial services for five years for inappropriate advice and the AFSL of his business has been cancelled by ASIC.
The introduction of Rhombus Advisory has caused a shift in the top advice licensees as Insignia separates its advice business into two channels.
Given the clear divergence between the cost of financial advice and clients’ willingness to pay, two experts explore how advisers can transform the way they convey value to potential clients.
Nearly 18 months since Invest Blue adopted its nine-day fortnight structure to support employee wellbeing, the national advice firm has enjoyed positive results across all metrics.
