Internet overtaking risk advice says NobleOak

An increasing number of Australians are preferring to fulfil their life insurance needs via the internet rather than utilising the services of risk advisers, according to a new analysis issued by life insurer, NobleOak Life Insurance.

A NobleOak white paper, issued this week, has confirmed that risk advisers are facing more challenges than simply accommodating the Life Insurance Framework (LIF), with the company's research claiming that 61 per cent of respondents indicated they preferred the internet to service their advice needs.

What is more, the research has confirmed a reluctance by consumers to pay for life/risk advice.

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It stated that while many Australians still relied on financial advisers, they appeared unwilling to spend a lot on this advice.

"More than 56 per cent of respondents stated they were unwilling to pay anything for life insurance advice," the analysis said. "This remains a fundamental problem for the industry."

It said 72 per cent of respondents would be confident in purchasing a life insurance or income protection product online, without financial advice if the right resources were available.

According to the company's research, when questioned about where they preferred to "obtain advice" about their financial needs, 48.1 per cent of respondents listed the Internet as their primary source, closely followed by family members at 37.9 per cent.

It claimed the internet had become a predominant source of life insurance advice by Australians, albeit advisers still played a role for many.

"Of those who seek to obtain life insurance advice, 32.2 per cent prefer using the Internet, while 25.4 per cent use a financial adviser and 20.4 per cent rely on family members," the NobleOak analysis said.

It said the impact technology had had on the use of financial services products had varied significantly between products with 79 per cent of respondents believing technology had changed their interaction with banks over the past three years, while life insurance and income protection had remained laggards at 37.3 per cent and 33.6 per cent respectively.

However the NobleOak analysis claimed it was inevitable the use of technology for purchasing life insurance would increase just like other financial services products.

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Nothing has changed, those who don't want advice, won't seek it. Doesn't matter what they are "buying". Whether, it be an online will kit, rather than going to a solicitor, or buy a pair of shoes online rather than going into a store. Its a bit of a pointless argument. And I do smile when it comes from an online/direct insurer. :)

What of course most consumers would not understand and why Life Insurance is not like any other commodity, is that until they claim, advised insurance and having someone to call on and help their loved ones through the process is critical and so much appreciated for those that been through this. It should never be about price or ease of use to get the cover even though I understand why consumers think that but trying to deal with a big multi national and sitting on a 1800 number for 30 minutes or more when at their worst, does the real benefit of an adviser come in to play. Would be interested if this White Paper asked whether at claim time they would prefer the use of a specialist to help their family during this terrible time or their spouse dealing with a 1800 number?

Worthless research really. If you ask any person under the age of 50 these days what is their main source of information regarding any topic, the internet will be the top response. These respondents have been asked what is their main source of 'advice' and are answering 'the internet' but only because of the way the Nobleoak have structured the question. None of them are receiving any form of advice, they are receiving information tailored to selling them a product, the general public don't understand the difference and will take everything they read online for gospel.

I rarely come across a client who has a direct policy in place and the one's that do know it's not worth the paper it's written on but wanted something in place quickly. They all end up replacing it with comprehensive, advised cover.

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