Getting clients to 'live smarter'

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A policy lapse can unwittingly leave clients significantly exposed in the event of a serious trauma event in life.

The average age of entry for Trauma insurance is 40, but 44 is the average age that people lapse on that insurance, and 49 is the average age of claim for Trauma, according to Asteron Life customer research.

Asteron Life’s executive manager Mark Vilo encourages advisers to educate clients on how to “live smarter” in their 40s.  The scenario of people lapsing in their 40s is an issue that Asteron Life says advisers need to address in their client retention efforts. Vilo said education was also key to addressing the insurance protection gap and advisers played a major role in driving that process.

“The 40s is a prime time of life to be living smarter,” says Vilo. “Work becomes increasingly important and it’s often when individuals are at their peak earnings, but the 40’s also carries a high level of financial responsibility in the form of a mortgage and multiple dependents – immediate family and ageing parents.

“Overlaying these pressures is the fact that in the 40s people also start developing chronic diseases. Forty-nine is typically the age people claim for trauma insurance due to middle-age onset of serious illnesses like cancer, cardiovascular diseases, stroke and diabetes,” he said.

Australians are letting go of their insurance just a few years before they might need it. This exposes them to a major financial gap in the event of a serious illness, accident or their own death.

 “It’s important that advisers routinely discuss with their clients the importance of retaining their life cover, to prevent financial exposure in the event of a major trauma event in life.

“Seventy-one per cent of lapses are driven by affordability pressures, so it’s essential advisers have the tools and strategies to help explain the financial exposure of lapsing cover.”

The comments come as Asteron launches a new adviser support package with a set of tools to help advisers engage better with clients. The website gives advisers the information to educate their clients to live smarter in their 40s by having some level of insurance cover that’s adequate for their life-stage.