The advantages and disadvantages of Direct Insurance vs. a Financial Adviser
Common Myth : If i go direct i will get a better price and faster service.
Well this has been proven to be very untrue and in fact you are most probably putting yourself at more risk as you would of not got the correct advice or the suitable product to match your needs.
Below is a little breakdown of what i mean. If you are serious about your finances and require the correct advice with an independent approach to placing your insurance and investments, then give me a call on 082 490 5182 or email me warrenb@oraclebrokers.com.
Insurance – Direct or via a qualified adviser?
It’s a life full of choices, and today there are more than any. But are you falling for the marketing hype?
The fact is, on daytime television we are constantly bombarded with the option to call for quick and easy applications with no medicals. But what does that mean to you?
The advantages and disadvantages of Direct Insurance vs. a Financial Adviser
Speed of implementation
With direct insurance, there is no doubt that it
is quicker. There is a reason for that! Consulting with a professional adviser can take about an hour. Theadviser then needs to research solutions for you and prepare a report outlining these. Paperwork needs to becompleted, then your application needs to be assessed by an underwriter.
No Medicals
With no medicals, the direct insurer has no option other than to price higher in anticipation of risks unknown.Also, many direct insurers hide behind a clause stating that ‘claims due to pre-existing conditions are not valid’. On the other hand, products mostly recommended by an adviser will be fully underwritten at application stageallows you the peace of mind knowing that you are covered in full when a claim is made.
Features
Direct or industry funds generally offer basic cover, without as many extra benefits available. Retail productstend to have a wider range of features that can be tailored to your own
individual preference and budget.
Cost
Direct cover is normally fully funded from your own cash flow, and often can be more expensive than anadviser sourced product. However, single premiums can often be cheaper (typically Group Life cover). Anadviser can work with you, and look at ways of paying for your cover via superannuation, and using variouslinking options that reduce the overall cost to you.
Tax Effectiveness
Most direct insurance premiums, as they are funded from cash flow alone are only tax deductible for theincome protection component. An adviser can show you how to pay for your insurance with multiplepossible benefits depending on your circumstances.
Guarantee of payout
Direct insurance normally offers no guarantee that a payment will be made, as often these policies are underwritten at the time of claim. (See ‘No Medicals’ above). A retail offering is generally underwritten upfront, which means that the payout is guaranteed providing that there are no pre-existing medicalconditions
that were intentionally not disclosed.
Do you need a financial adviser to talk to you about your insurance options? Then contact me on 082 490 5182 or email warrenb@oraclebrokers.com.
