Put policies online for greater client takeup?

by |

Many Australian insurers already offer online access to insurance policies and policy disclosure statements but these tend to be for car, home and travel insurance, and often the question asked surrounding these is: ‘have you read and understood the policy?’.

Given the complexities within a wealth protection policy, such as life or income protection insurance, would placing these documents online threaten or enhance the role a planner plays in providing advice and assisting clients in selecting the right insurance product?

This debate is currently taking place in parts of the USA where Rutgers University insurance law professor Jay Feinman says insurers should be pushing more policy details online.

Feinman says insurance in the USA is such that many people don’t know what they are buying until they have bought it, despite choosing their level of cover, excess and premiums up front. He says people taking insurance are not able to read the fine print until after they have become a customer.

However he points to a scheme in Nevada where the state regulator publishes the standard policy forms from the states’ 10 largest home and car insurers allowing people seeking insurance to shop around to compare policies.

Feinman admits this step alone will not tackle the problem of insurance education, with many people choosing not to read, but consumer groups could take on the task of creating guides that compare and rate the benefits of one policy against another.

While it appears that the Australian market is ahead of the USA in placing information online the issues around insurance, education and understanding seem to be similar.

 

  • alleycat on 13/02/2013 10:54:27 AM

    As an adviser with some 40 years experience in the business, both in management and as an adviser, I can tell you there are some companies who don't like to pay claims, wording in contracts are not the same and in fact there are some employees working in these life companies who don't understand what their contract wording mean, so how in the hell will the average consumer know either.
    Going on line guarantees like many advisers including research houses who can't tell the difference between one companies policy contract from another, will base the motivation for recommendation/purchase quite often down to cost.
    Cannex research a few years ago put out a comparison quote chart which favoured a particular life company. The only problem is their premium comparison was out by 25.0% from that companies current quote system. And yet the BDM promoting it had no idea.
    One company guarantees under Income Protection to pay if you lose 20.0% or more of income through sickness and accident. The pretenders who offer what's perceived as the same thing require you to lose 80.0% or more of income before they will pay. They are not the same contract by a long stretch.
    Most companies will pay if you cannot do one or more important duties. What happens if you can do all my duties, but only some of the time.
    e.g. A Dental surgeon with Hep C ?
    On disclosure will probably have no patients, therefore no income but can still do all his duties.
    For those who cannot tell the difference, a duty based contract will not pay but an income based one will.
    Who seriously thinks a client before an event can tell the difference or discern between Trauma benefit contracts?
    This like all things now be proposed either by government or the public servants serves no purpose other than to wipe out an advisory industry who for the most part do have a positive effect on many lives when they most need it.

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions