Direct Insurance seems to be increasing its presence, especially through TV advertising. Is this because of the promises of automatic cover with no health questionnaire or the direct insuranceprotection of ones income without any proof of income? It’s easy to get the cover in place but what do you really get?

APRA has raised concerns over the quality of the products and business being written. So what pitfalls with direct insurance should you look out for:

  • Exclusions on pre-existing conditions (diagnosed or undiagnosed). Medicals checks at time of claim.
  • Proof of income must be provided at time or claim for Income Protection. If your income has decreased since application so may your payout.
  • Majority of the time direct Life Insurance or Income Protection is more expensive.
  • Income Protection maximum payout 5 years. Advised Income Protection provides monthly payments until age 70.
  • Mental Health exclusions.
  • Income Protection definitions based on ‘usual duties’. Advised Income Protection definitions is based on ‘own’ occupation as well as offers the ability to return to work and still receive insurance payment.
  • No choice of levelled premium.

Before your apply for the direct Life Insurance the TV tells you to and start paying for something that you may not provide you the cover you expect, take some time and obtain good quality advice.

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Thomas Jacks BCom (Acc), SMSF SpecialistTM, Adv. Dip F.S. (FP)
“I want to be able to assist clients with their investment and retirement planning by providing real strategy advice. It’s my aim to not only help my clients but to educate them by addressing the entire picture” Google Plus

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