Every time you turn on the TV there is an ad telling you that you can take out life insurance over the phone with no medical and only two questions. There are also an abundance of websites offering insurance that may make you think shopping for insurance online is easy & safe. It is a case of ‘if it’s too good to be true then it probably is!’
Socks. Scissors. Sandwiches. You can buy anything online these days! Shopping online means you can take your time, compare prices and shop in your pyjamas. However, there are some products that you should never buy online, and insurance is one of them.
To ensure you are getting a policy suitable for your family and your lifestyle, you need to know what you need and what you can afford. Although these criteria sound simple, most people underestimate the amount of insurance they need. A financial adviser can be invaluable, not just to help you find the relevant insurer, but to identify the amount of coverage you need.
Most online quoting systems default to the lowest coverage amounts. They also leave out extra options such as trauma reinstatement. If you don’t pay attention, you won’t be guided to other options as you would if you were dealing with an experienced adviser familiar with your situation. Some online insurers encourage you to click through without examining options, and will provide quotes filled with technical jargon and lengthy disclaimers. You may have to comb through the FAQs to find answers to your questions, if you find them at all.
|You may get attractive quotes but you probably won’t have adequate coverage.|
Some websites promote ‘name your own price’ tools. You can name your price, but you’ll end up with a bare bones policy with the lowest coverage limits available. For example, in the case of trauma insurance, you may find $25,000 coverage for $25 per month* online. But with cancer treatment costing an average of $816.69** per month, you would be nearly $10,000 out-of-pocket after 12 months, without factoring in any other costs such as time off work, or modifications to your lifestyle. An adviser will help you work out how much coverage you would need to live comfortably if you fell ill. You’ll be well informed, will know what options you need, why you need them, and in what amounts.
Insurance is far too important to DIY, and buying your insurance online or over the phone is a gamble. Being properly insured is more than just choosing an adequate policy that offers a low premium. Everyone wants to save money, but you don’t save money in the long term if you have a policy that offers inadequate protection. If you go to claim on your insurance only to find that you aren’t covered, you’ve been throwing money away on a useless policy.
If you are considering claiming on your insurance, chances are that you are already emotional and stressed. The process of claiming on your insurance can be complicated and if you are working with a faceless online company, this process would be even more frustrating. Don’t struggle with completing a DIY insurance claim online – if you have taken out insurance with a reputable provider, your financial adviser can handle claims for you. We know exactly what to do and can hold your hand through the complicated paperwork and tough times.
The Internet is an extraordinary tool, but not for buying insurance. Buy the wrong sized socks online? Send them back. Buy the wrong policy online? There are no refunds, and you may suffer the consequences for a long time.
Written by Emma Linton Doig, Practice Officer at Fortress Financial Solutions
*Based on iSelect insurance comparison done of 27-year-old non-smoking female, earning $70,000 p.a. without any other insurance.
**Figure taken from News.com article, 13 Oct 2015; http://www.news.com.au/lifestyle/health/health-problems/survey-reveals-women-with-secondary-breast-cancer-face-outofpocket-medical-expenses-up-to-25000/news-story/f2a2d6c1f00c6664e33151db26720844
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