But how much does it cost?

You know whenever we are “purchasing” something we always want to feel assured that we are getting value for our hard earned money. No matter what it is, no one ever wants to feel like they have been “sold” instead they wish to feel that they have purchased or acquired something of value.

Well an insurance policy is no different, yet many companies “sell” policy features based on how low the cost is and worse still, on not having to “do any medicals”. We have all seen those TV commercials that emphasize these supposed advantages to purchasing a policy through them as opposed via an authorised and accredited expert such as a financial adviser. Even some poor quality advisers still operate the “TV” way too unfortunately.

In obtaining a “cheap” policy the “easy way”, that is to not be medically and financially assessed, one is guaranteed (almost) to go through incredible hurdles come claim time. Ultimately isn’t that where your interests lie in having a policy? I’d much rather pay more, knowing that all medical history has been disclosed so that come claim time, the acceptance of my claim is far higher. As one financial adviser once said to me, if the hurdle isn’t at the beginning of the process, it will certainly be at the end (i.e. the claim request). The last thing any person wishes to experience is to persistently prove that they are entitled to their claim benefit during assessment. The trauma that a client often experiences that gives rise to a claim (death of a loved one, severe personal injury or illness etc.) is more than enough to deal and cope with let alone going through the arduous process of a claim.

In addition, it also pays to have a more expensive policy analogous to the additional benefits you would be entitled to. An additional cost to waive a premium, or obtain a nursing benefit whilst being hospitalised is a nice bonus to have when required. Ultimately you do get what you pay for…Now don’t get me wrong, I am not advising you to take these options, they are purely quoted for example purposes.

So in summary, don’t be motivated by cost alone when selecting or weighing your policy options. Seek advice from the experts (not an actor on TV) when you compare and research what is available to your circumstances, that is what your financial adviser is there for!

For an appointment with a qualified Wealth adviser, contact us.

Written by Maria YankosPractice Manager, Odyssey Financial Management

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Whose advice are you listening to?

The other day, I contacted one of our clients to let her know her insurance policy premium was overdue and that the policy would lapse if it remained unpaid.

For privacy reasons I will name her Sandra. Sandra said that upon the advice of her “trusted” accountant, she will allow this policy to lapse as her circumstances have now changed.

What were her new circumstances? Very sadly, her husband had been diagnosed with a terminal brain illness. What was the accountant’s advice? To allow her Income Protection policy to lapse and redirect the “saved premiums” to mortgage repayments.

On several levels, the accountant has not acted in the best interests of his own client Sandra.

  1. What happens to Sandra should she find herself in a position to be unable to work and earn an income to pay for her living expenses?
  2. Has Sandra’s overall position (financial and her own health)  been taken into account when advised to cancel her insurance policy, which Sandra has had for 7 years (health can often change in that period of time…)
  3. Just as importantly, the accountant has advised in an area in which he is not qualified to advise in.

The above scenarios happen all too often and the following needs to be kept at the forefront when acting on such advice:

  1. Is the person providing me with advice, qualified to do so? We are often tempted to act quickly and irrationally on forecast information obtained over the fence or at the barbers when it comes to investments…
  2. What is the person providing me with advice’s underlying basis for such advice, it is you, the client’s, best interest?

So in summary, ensure when you share your financial circumstances when seeking advice, you speak to an expert in that area, ensure the expert knows the full picture and overall, you will not be worse off as a result.

For an appointment with a qualified Wealth Adviser, contact us

 

Written by Maria YankosPractice Manager, Odyssey Financial Management

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This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs.
Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs.
Odyssey Financial Management is an authorised representative of Total Financial Solutions Australia Limited.