There are some serious misconceptions out there about personal risk insurance. Take it from one who knows that all that glitters is not gold when it comes to insurance. The super-convenience of over-the-phone, immediate instant sign-up, direct insurance with no medicals may lead to disappointment later on if you don’t read the fine print. Here are three (3) ‘behind the scenes’ tips if you are thinking about insuring yourself or your family.
- Buying personal insurance cover direct from an insurer can mean paying higher premiums, compared to similar cover purchased through an adviser. Direct insurers generally charge standard premiums to everyone instead of asking each individual for full health disclosure up front. Depending on your age and health, it may be more expensive because the insurer has to build into the price the higher risk of not knowing who is healthy and who is not. However, they are guided by fairly accurate ‘group statistics’. But here is the catch! If they don’t ask questions when you apply, they certainly will ask questions, and lots of them, whenever you make a claim. And that’s precisely the time you don’t need the hassle. If you don’t read the contract which most people don’t, it is then you will discover the policy exclusions, and may find that after paying premiums for years, those health issues you already had when you bought the policy are not covered. You may even find that, as you get older, the amount of cover you originally bought reduces over time. That means if you do make a successful claim, it may be a lot less than you expected.
- Insurance purchased through an adviser usually gets you a policy that is better tailored to your needs. Good advisers explain the important parts of the contract, especially what is not covered. From the time your application is received by the insurer, you have interim cover and a cooling-off period. And importantly, if you make full and honest disclose of your medical history during the up-front underwriting process, any valid claim that falls within the scope of the cover will almost certainly go through. If you have a health problem now or in the past, the insurer will make it crystal clear to you at the start whether exclusions or other conditions apply. You can also rely on good advisers to help you with your claims process, and they can help clarify if you are unsure whether you have a claim that is covered by your policy.
- Let me bust a big myth here! Almost nobody is required to have an insurance medical exam these days. The reason is that if the insurer requests an examination or any test, the insurer has to pay for it. What really happens is that you disclose your medical history, either in your application or over the phone to a qualified nurse contracted by the insurer. From there, the insurer will probably request your medical records from your doctor(s). You give that permission in your application. Depending on your history, they might ask for a blood test. Insurers have their own qualified medical testing contractors and your adviser will arrange a qualified nurse to visit you at a convenient time and place at no cost to you. For most people, that’s it. However, be aware that your BMI (weight to height ratio) is a big deal to insurers. A BMI of 30 or over will limit your insurability because of a range of health risks that obesity brings.
If you want to talk to me about personal risk insurance, I am happy to have a chat and answer questions over a cup of coffee, obligation-free. You can also get a good handle on cost before you start with comparative quotes from two or three insurers that are likely to best suit your specific needs. If you decide to proceed, you can choose to pay by fee from your own pocket or by way of commission paid directly from the insurer to my licensee.