Consumers reviewing, renewing and claiming on their policies


Brett Wright

A recent report released by life insurance specialist Brett Wright, has shed some light on the life insurance commission debate, from an advice practitioner and consumer point of view.

The report breaks down the “Getting Covered” component of the consumer-adviser relationship and advice process, whilst also digging into the review and renewal of life insurance, claims and how the relationship between consumers and advisers works from a real world perspective.

In his report, under the “Reviewing & Renewing” section, Wright explains, “Commission/brokerage covers the cost of any market reviews and policy adjustments, whilst encouraging the client to review the ongoing appropriateness of their cover and reconfirm the value and need for it, without the fear of incurring advice and service fees on top of stepped premium rate increases at each renewal, as the client gets older.”

Versus the experience of Fee for Service (FFS), where, “Using Fee For Service, advisers will need to charge consumers between $600-$1,500 each year to do these reviews and make any adjustments, plus consumers will also need to cover any increase in premiums from the insurer too (not uncommon in today’s market for a stepped premium to increase 10-25% per year).”

When it comes to making claims, Wright points out, “When consumers need to claim, advisers are there to organise all of the forms, work with their doctors and manage their insurers, so they and their family can focus on recovering, without the stress of back and forth with insurers and lawyers.” and he also explains the huge amount of advocacy work advisers do on behalf of their clients, to maintain integrity and trust in the system at the most important time for a client, which is often whilst consumers are at their most vulnerable, after after being dealt the physical, mental and financial blows associated with losing the ability to work, or a loved one passing away.

The report also mentions how the increasing complexity of income protection claims in particular, can unfairly blow costs out for claimants, with each monthly claim submission (which will continue to become more and more complex after APRA’s intervention).

Read the report


Wright’s report has been supported by key industry leaders such as John de Zwart CEO NEOS Life, Michael Pillemer CEO PPS Mutual, Wayne Handley MD Bombora Advice, Helen Blackford CEO Lonsdale, Millennium3 & IOOF Alliances, Don Trapnell Director Synchron, Nettie Handley Life Insurance Advice Advocate and Ben Donald Adviser and Director Austbrokers Financial Solutions.

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