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, following 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.
- What happens to Sandra and her family should she find herself, through illness, unable to work and earn an income to pay for her living expenses?
- 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 seven years (health can often change in that period of time…)
- Just as importantly, the accountant has advised in an area in which he is not qualified to advise in.
The above scenario happens all too often. Consequently, the following points need to be kept in mind before acting on any such advice:
- Is the person providing me with advice, qualified to do so? We are often tempted to act quickly, and irrationally, on information obtained over the fence, at the bar-be-que or at the hairdressers, when it comes to investments and personal insurance protection; and
- What is the underlying motive of the person providing me with the advice? In particular is the advice in my best interests and based on a full understanding of my particular circumstances?
So, in summary, when you share your financial circumstances seeking advice, you need to speak to an expert in that area, ensure the expert knows the full details of your circumstances, and that any advice is in your best interests.
For an appointment with a qualified Wealth Adviser, contact us at email@example.com or phone at 1300 761 669 for financial consultation.
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