Buying Insurance Direct vs. with a Financial Adviser
In recent times, New Zealand's insurance industry has experienced a significant surge in 'direct distribution'. This involves insurance companies selling their products via digital channels such as banks, or via online comparison tools. With the growth of this direct approach, the question of whether it is more advantageous than obtaining personalised advice from an independent advisor is something many people have been considering.
Let's take a closer look at why purchasing insurance direct may not be the right choice and why getting independent financial advice is a great option!
Misconception #1: Buying direct is faster and more convenient.
Insurance companies who market their products directly often promote the convenience, ease, and rapidity of their online application form. However, a shorter form means that there are fewer questions posed regarding one's health - this makes the process quicker, but it could possibly lead to mistakes which could cause issues when filing a claim.
Remembering the symptoms and conditions you experienced years ago is essential when making a claim. To help you do that, the more detailed the application questions are, the better. On the flip side, if you answer too many generalised questions, you could miss out on essential information and potentially put your claim in jeopardy due to material non-disclosure, leading to an unpaid claim.
We think having an adviser on board is essential when you first apply for any cover. Your adviser will walk you through the application forms, explaining the importance of the questions asked, and why they are important and emphasising the need to be transparent. Although this might be a lengthy process, it also provides the opportunity to customize your coverage and make sure your policy is suitable for your specific circumstances, giving you complete confidence in your coverage.
Misconception #2: Insurance companies are all the same anyway so it doesn’t matter who I buy from
It's no secret that not all insurance companies are made equal. While direct products may not offer the same coverage as those that advisors recommend, there's an even more critical difference between companies – how they handle claims!
When it's time to make a claim, the discrepancies in claims management become apparent; all too often, people come to realize that not all insurance companies provide the protection they need. Just look at the abundance of press coverage concerning disputes around claims - some insurers will do anything to avoid having to pay out. Without an independent financial adviser who possesses the specialist expertise and experience of the sector, you can find yourself vulnerable to the company who you once trusted to be there for you.
Misconception #3: An adviser wont be there when I need them anyway!
The importance of a financial adviser's advocacy role is often overlooked. But life has a way of throwing curveballs at us, and when it does, the last thing anyone needs is the anxiety of managing a claim. Having an adviser by your side when that day arrives, however, can take the load off your shoulders, simplifying the process and ensuring that the product provider is fair. This way, you can remain focused on what really matters; you and your family.
Having a trustworthy, reliable advisor can be a priceless asset! They will assess and make sure that you and your family have the necessary level of protection, keeping an eye on any changes in your circumstances. But, above all, they will be your ally during the claims process.
If you want to ensure your insurance covers all your needs, whenever you need it, having a great independent adviser in your corner is the way to go! So why not seek out our advice? It'll be the best decision you make.