Life insurance is an extremely personal product and finding the right policy can be a daunting task, especially when you have no knowledge of insurance policies. What is more, the huge number of available policies in the market does not make it easier. How do you ensure that you get the right product that will suits needs perfectly? Even though it is not a prerequisite to purchase a policy, experts recommend getting life insurance advice before settling on a policy to ensure you do not overlook important things.
Where Can You Get Life Insurance Advice?
When it comes to life insurance advice, your agent may be able to provide you with basic tips on the best life insurance policy at the risk of being biased, especially when he is working for a specific company. If you want expert advice, it is best to acquire it from a licensed life insurance advisor. This sort of advice is designed to influence a person's decision in choosing a policy. As such, the people who offer it are regulated by the Australian Securities and Investments Commission. They are not only required to be licensed, but to meet certain training and competency standards to ensure they can give expert advice.
Getting Personalized Advice
Unless expressly requested by the client, life insurance advice need not be personalized. However, personalized advice is more helpful when choosing a policy as it will include a thorough analysis of all the information that is likely to influence your policy. To get personalized advice, advisors will usually collect information on:
• Personal details
• Details on dependents and other family members
• State of health and any pre-existing medical conditions
• Financial information such as earnings, job status, expenses, assets and liabilities
• Details of the current policy if any
Personalized advice will help you to identify your insurance needs, select an appropriate policy and tailor the cover to fit with your budget so you get the best out of it. Without personalized advice you may settle on a cover with a modest amount that would not fully address your financial needs and those of your family when you are gone.
The Statement Of Advice
A life insurance advisor is required to provide a statement of advice after giving personalized advice on policy purchase. The statement is a summary of the entire process of getting advice and includes:
• Summary of the client's personal and financial circumstances
• Primary goals and priorities of life insurance
• Product recommendations
• Appropriateness of the advice
• Pros and cons of going through with the advice
• Advisor/s' remuneration
As a recipient of advice, you are under no obligation to use any advice given when settling on a policy. However, your advisor is required to provide competent advice that you can use to make sound decisions. Should the advisor provide misleading information that you act upon and lose, you can sue him.
Getting personalized life insurance advice may be a time consuming and expensive process, but with the right advisor, it is worth it, as the advisor will have the right experience and expertise to find a competitive policy for your insurance needs.
Kerrie Peacock is an expert in the personal insurance industry. She offers vital insights to help Australians make competent financial decisions. More professional advice can be sourced from MeCovered. To get more insight on a cover that suits you, visit www.mecovered.com.au/life-insurance-advice/.