Are You Paying More For Personal Insurance Than You Should Be?

by Dominique Schuh

Shares were buoyed by slightly better-than-expected economic growth numbers, but a slide in Wesfarmers kept the market in the red, while sentiment remained fragile ahead of a number of global risk events this week. The benchmark S&P/ASX 200 index slipped by the slimmest of margin, 0.005 per cent, to 5667.2, its third close in the red this week.
The Australian dollar hit a one-month high on Wednesday as economists breathed a sigh of relief after the release of weak but as expected first-quarter GDP growth figures. The local currency gained a third of a cent to US75.3¢ immediately after the Australian Bureau of Statistics revealed the economy grew by 0.3 per cent over the first three months of the year, in line with consensus expectations. The Aussie then continued to push higher through the session to fetch US75.4¢ in late trade. Globally, worries about the outcome of the UK elections, a potentially dovish stance by the European Central Bank at its policy meeting and former FBI director James Comey's Senate testimony kept investors on their toes.

What this means for you:
I am currently attending an insurance conference in the USA which has prompted me to write about a recent survey that has found that over eight in 10 Australians were swayed by the cost of life insurance premiums, with price competitiveness being more significant to consumers than product features, claims reputation and service levels, according to research from life insurer NobleOak.

This research also found that there has been a move towards an increasing preference for consumers to purchase insurance online. Whilst this may be convenient, the shortened application process and limited scope of some direct offerings in the market means consumers can be at greater risk of not being in the right cover which is concerning as these shortened application process can result in problems at the time of claiming when customers may need to answer more detailed health questions and supply a report from their doctor. Not only does this slow the process down at a time when a customer is emotionally distressed, but it could reveal a pre-existing condition with the claim being denied.

Direct insurance purchased through the television or other streams will almost certainly not be structured to allow you to maximise the tax concessions available, which means you could be paying more for this insurance than you should be. If you don't have personal insurance or would like to review your existing personal insurance to make sure that you and your family are adequately protected, please give us a call. We have recently had the experience of a client having to make a claim against their trauma cover due to a shock diagnosis of a life threatening disease. Obviously these types of situations are incredibly stressful regardless of your financial situation, but our client has told me that they would be in a far more terrible situation if they also had to worry about paying the bills as well. 

If you would like to review your current structures, contact us today here or call us: 5482 2855