Russell Cain

A Bill recently introduced into the Queensland Parliament[1] has highlighted the need for Australia to commit to better protecting firefighters, according to LifeInsuranceDirect.com.au.

“While the Bill is a step in the right direction, we don’t believe it goes far enough in helping to protect firefighters and their families,” said LifeInsuranceDirect.com.au CEO, Russell Cain. “Firefighters put their lives on the line for us and they deserve better.”

The Bill, which would change the Workers Compensation Act, seeks to put in place a qualifying period a professional firefighter would have to work as a firefighter before becoming eligible for a workers compensation cancer claim. Volunteer firefighters would also need to attend 150 fire events in order to claim. The Queensland Liberal National Party has put forward an opposing Bill which would cover all firefighters for the 12 listed cancer conditions included in the Bill, regardless of years of service or number of fire events attended.

The Bill follows on the heels of a national Monash University study of over 230,000 firefighters, released in December last year[2], which found higher rates of some cancers in firefighters than in the general population.

“Australia has an obligation to ensure that our firefighters, who face greater health risks – sometimes for years after they stop working as firefighters, according to the Monash study – are adequately covered,” Mr Cain said.

If the Government is unable or unwilling to protect all firefighters via the proposed workers compensation scheme, Mr Cain argued it should subsidise trauma insurance policies to ensure firefighters past and present, and their families are financially protected.

Trauma insurance (sometimes called critical illness insurance) pays a lump sum if the person insured suffers a critical illness or injury. A trauma policy usually covers a host of conditions including a large range of cancers and severe burns.

LifeInsuranceDirect.com.au researched how much it costs to buy a stand-alone trauma insurance policy for a firefighter and how much it costs to buy a trauma policy with life insurance of $500,000 added on.

“Surprisingly our research found that in general trauma policies for firefighters are no more expensive and have no more exclusions than other policies held by people working in other occupations, despite the more obvious risks,” he said.

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[1] The Workers’ Compensation and Rehabilitation (Protecting Firefighters) Amendment Bill 2015

[2] http://www.coeh.monash.org/downloads/finalreport2014.pdf

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Russell Cain

Life insurers are allowing a misperception that advisers are being paid upfront commissions of up to 120% to continue, according to Life Insurance Direct.

“Their intent might be unclear but the effect is not,” says Life Insurance Direct CEO, Russell Cain. “This view of adviser remuneration is popularly accepted but, in our experience, it is fundamentally untrue.”

For the past few years, the Life Insurance Direct team has been tracking applications, policy transactions and commission payments received. The resulting data, entirely based on their experience, (approximately 3000 policies across 10 life insurers) provides an interesting case study. It reveals that the average annualized premium was around $1494. It also reveals the following interesting findings around what the life insurers actually paid in terms of commission:

• The “120%” paid by life insurers includes GST (10%) which is paid to the ATO and not the adviser
• Life insurers generally don’t pay commissions on frequency loadings (6-9%), policy fees ($5.61 – $8.82 / month) or stamp duty (0-10%) but these are included in the mythical “120%” cited by these companies. Excluding these elements means the average commission received for the policy implementation is closer to 89.83%

“We analysed the data breaking down what insurers actually paid,” Mr Cain says. “This data therefore gives an indication of what the proposed changes to adviser commissions are likely to mean in real terms and who will really benefit or suffer from the proposed changes.”

Mr Cain said this prompts questions around how much consumers should be paying for life insurance.

“When it comes to life insurance, it’s not necessarily a case of you get what you pay for,” he says. “Life Insurance Direct also conducted research into over 20 life insurance offers that shows that cheaper policies can often offer better value than more expensive policies. Generally speaking, life insurance policies sold direct to the public by big brands are usually more expensive and less comprehensive than those offered via financial advisers.”

To help consumers to make better-informed choices about insurance, Life Insurance Direct created the Life Insurance Direct Quote Index that allows Australians to directly compare the cost of various types of life insurance policies.

Users enter some key details (such as their gender and the level of life insurance cover required) and the Index models the data to show, and compare, the cost of the various options. Using an example of a 50-year-old male wanting $500,000 of life insurance, Life Insurance Direct found that annual premiums could vary by as much as $1,600 per year.

“In the past, life insurers have competed fiercely for business from financial advisers,” Mr Cain says. “This competition led to more comprehensive and better priced policies for consumers. The Quote Index highlights that the dynamic doesn’t operate in the direct insurance market.

“Reforms that ultimately reduce competition may have a significant negative impact on consumers,” Mr Cain says. “Unfortunately, the empirical data and intuitive tools available from lifeinsurancedirect.com.au, indicate that the interests of consumers may not be served at all well by the reforms.”

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Russell Cain
Life Insurance Direct Australia CEO

With the plethora of life insurance offers now being marketed to Australians, consumers may be confused about which policies are more affordable, according to Life Insurance Direct Australia (Life Insurance Direct) CEO, Russell Cain.

“We are seeing a lot of life insurance being advertised by big brands on television and online, but while it may be quick and easy to buy this way, it isn’t always the best value for money,” Mr Cain said.

To help consumers make more informed choices, Life Insurance Direct conducted first of its kind research into over 20 life insurance offers and created the Life Insurance Direct Quote Index (The Quote Index). The Quote Index allows Australians to directly compare the cost of the various types of life insurance policies available.

Consumers enter details such as their gender and the level of life insurance cover required. This data then produces a graph which shows pricing for each of the various options. Using an example of a 50-year-old male wanting $500,000 of life insurance, Life Insurance Direct found that annual premiums could vary by as much as $1,600 per year.

To use the Life Insurance Direct Quote Index and view a graph, visit http://www.lifeinsurancedirect.com.au/quote-index/

“Interestingly, what we discovered was that generally speaking, premiums on retail policies offered via financial advisers are often significantly cheaper than those offered direct to the public by big brand insurers or providers,” Mr Cain said.

In light of this research, Mr Cain urged consumers to shop around. “While price is not the only factor when considering life insurance, it is important, so it is critical to shop around, get educated about life insurance, speak to an expert and compare.”

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