Technology makes our life easier (well it’s supposed to!) and we can now access goods and services that we never were able to a decade ago or even last year for that matter. Everything seems to be coming online and purchasing Life Insurance Online is no different, but my answer to that question is…NEVER!
There are companies who have substantial client bases such as The Warehouse, and Countdown who are moving in on an area which is normally for registered financial advisers and the insurers themselves. Personally, I don’t think banks should even sell Life Insurance products, they should stick to lending, but that’s for another time.
IS IT WRONG TO BUY LIFE INSURANCE ONLINE?
The products themselves are not the real issue, however, in some cases, the product you buy, can be a “light” version of what you could buy from an adviser. In other words, you may not have the more comprehensive benefits and upgrade options you get from an adviser based solution.
Apart from buying what may be a limited version of the cover, the real issue is what you disclose when applying for your life insurance online, and what they ask you, there lays the danger.
WILL YOUR CLAIM BE HONOURED?
When you purchase Life Insurance online or via what I would call a nonprofessional adviser, where they use what we call a “Short Form” you increase your risk dramatically of having your claim declined. Insurers go through what they call an Underwriting process to assess you medically, and whether you would be eligible for Life Insurance based on the information you have supplied them.
It is very easy and convenient using this method and would suit some people, especially those with a busy lifestyle or who are adviser adverse, so the temptation to take up such an offer without any fuss seems like a great idea, but can provide a false sense of security and end up costing you much more later.
At claim time, the insurer will obtain your medical information to assess whether you disclosed everything when you applied for the insurance, and if there is medical information which comes to light that you did not tell them about and that information meant that would not have given you cover in the first place, then your claim could be declined because of Non-Disclosure and it’s all been a waste of time.
BE THOROUGH, DISCLOSE EVERYTHING
There is nothing quite like sitting one on one with a client and going through a full application form to make sure everything is disclosed. When we apply for cover for a client we make sure all medical information and history are disclosed to the insurer to avoid your claim being declined by the insurer.
When we sit down with a client, we have an open conversation about any medical issues and instinctively know whether we need to dig a little deeper to get more information about a condition even if you think it’s not relevant or important. You simply cannot achieve that online, short forms or even over the phone, nothing beats an experienced adviser.
WHAT IF YOU HAVE ALREADY PURCHASED LIFE INSURANCE ONLINE?
My suggestion is to contact us and we can have a chat about what type of cover you have and what you have disclosed to the insurer. In most cases, we would need to replace this cover with what we call a fully underwritten policy, so at least you will not have any surprises at claim time.