5 Reasons to use an Advisor

So, why would you use an adviser to help with your insurance needs when you could just talk to your bank, call up one of the many insurance companies advertising on the TV or just arrange it through your super fund?

Well, here are five reasons which we believe make a very compelling argument for using an adviser.

1. Free Advice

There is a lot to think about when it comes to insurance, and making the right decisions can be the difference between receiving a claim or not.

  • How much cover do I need? – an experienced adviser who has dealt with real life claims situations and understands what your needs might be in the case of a claim can guide you to appropriate levels of cover.
  • Which insurance company is the best? – there are over 10 retail life insurance companies in the market and 100’s of insurance products offered either through your super, credit card or direct over the phone. You would have no way of knowing which is best for you and in many instances the difference between the right and wrong policy can come down to one or two words in a 100 page PDS.
  • How should I structure my insurances? – Inside or outside superannuation? Stepped or level premiums? Linked or standalone policy? Standard or featured product? – the list goes on. Again making the right or wrong decision can be the difference between a successful claim or not. It can also affect long term affordability whether it be through taxation efficiencies or just general structuring gains.

And to top it all off – all of this comes free from your insurance adviser. The insurance company pays your adviser for recommending their products. This allows your insurance adviser to operate on your behalf without charging you directly.

2. Premiums are no more expensive going through an adviser.

Believe it or not, you cannot access these insurances direct with the insurance company any cheaper than what you can through an adviser. In actual fact, if the insurance company does distribute their policies direct to the public, they are more often than not more expensive than through an adviser. Either that or they are inferior in terms of quality.

Why is this?

When an adviser introduces a customer to an insurance company, this means that the insurance company hasn’t had to spend money acquiring that customer themselves. This saves a significant amount.
Insurance introduced through an adviser is generally ‘stickier business’. This means a longer term, more profitable customer for the insurance company.

Insurance introduced through an adviser is generally fully underwritten. This means that all medical information is provided by the customer upfront meaning the insurance company is aware of all risks. They may choose to exclude some of these conditions or decline all together but by being aware of all of the risks and having the ability to decline or exclude cover, their ‘risk pool’ is less risky and don’t need to charge extra because they are covering greater risk.

3. Claims time

This is arguably where you adviser can help you the most.

If you need to claim on your life, TPD, trauma or income protection insurance you and your family will be under as much emotional and financial stress as what is imaginable.

The last thing you need is to be stressed from dealings with an insurance company. Your adviser should handle all liaison and negotiations on your behalf.

Not only does this alleviate unnecessary stress, quite often in tricky claims situations, your advisers experience and knowledge of product wording and insurance company workings will lead to a more successful claim outcome.

4. It’s Free!

Similar to how a mortgage broker works, an insurance adviser generally does not charge a fee for their services.

They can do this because the insurance companies pay advisers for introducing clients to them.

5. Choice

Compared to arranging insurance through your bank or your superannuation fund, your insurance adviser will generally have access to a wide range of insurance companies and products to choose from.

The insurance marketplace in Australia is fairly crowded meaning there is generally a lot of competition for your business.

In addition to the natural competition, some insurance companies choose to specialise in certain niche markets. Whether it be age, gender, occupation or level of cover related, one insurance company may stand head and shoulders above another in terms of value for money, just because they have identified your demographic as its preferred customer.

Please feel free to contact us if you would like to discuss your situation further.