Many of us do our own research into what insurance provider we use but all too often we hear of clients who have gone with a provider without fully understanding the product they’re paying for and misunderstanding what they need to disclose.
We recently heard of a case where a husband and wife took out two life insurance policies through two different providers. The husband passed away suddenly from a heart attack. One policy which had been in place for a few years was paid out, the other which was in place for only a few months was declined.
The claim was declined based on the fact that the husband had suffered from mental health issues many years before and he had not disclosed these issues when he applied for insurance cover. Although the heart attack was completely unrelated to his previous mental health issues the insurer advised that had they known about his this they would never have offered him life insurance in the first place.
Legal advice is now being sought.
Key points to take away
- Without an advisor they chose a product without understanding the quality of the product or the insurer.
- Without an advisor they were not given any understanding of the importance of full disclosure of medical history.
It’s important that you understand life insurance is a very personal product. There’s only one of you, and your cover needs to be tailored to your circumstances, and your budget.
The amount of cover you need and the types of cover you need, can vary greatly depending on your individual circumstances and not all insurance policies are equal – some have additional, and included, benefits and features.
An advisor can also help you make your insurance more affordable by recommending strategies including:
- calculating the amount of cover you need, rather than taking a guess
- taking advantage of the tax-effectiveness of insurance inside super
- choosing the right combination of benefits and extra options
By looking at your income, your debts and your family’s circumstances, an advisor can help you get the right cover and the right structure to meet your needs.
If you wish to discuss any of your insurances please contact your Morrows Advisor on 9690 5700, alternatively you can email morrows@morrows.com.au.
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