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Three questions to ask your life insurance advisor
Have you been thinking that you may need to get life insurance? Making sure that you research and choose the right policy – so that your loved ones are financially protected in the event that something happens to you is a key part of the insurance process.
As with all types of insurance, life insurance policies can vary from insurer to insurer. To identify these differences – which are often subtle – you’d probably need to devote substantial time to reading all the brochures and websites use a magnifying glass and read the fine print. Or, you could talk to a life insurance advisor.
Advisors are able to answer all the questions you have about life insurance, and also highlight the information that you didn’t even think to ask. Equipped with the right information, it’s a lot easier to decide which policy is right for you.
The questions already on your mind
Some questions that most people ask their life insurance advisor straight away include:
- How much insurance cover do I need?
- What type of cover do I need?
The answers to these questions will still be general in nature but they form the baseline for the next stage of your life insurance journey – comparing the specifics of policies to choose what is right for your needs.
Three questions you may not think to ask
Once you and your advisor dive into the world of comparing policies side-by-side, you need to dive a little deeper and tell your advisor about what you want from your policy. Accurate information will help to them and the insurer to provide a seamless experience – that is, should those circumstances arise – receiving a timely and sufficient payout if you or a loved one ever have to make a claim.
Here are three key questions that you should ask:
1. Are there any exclusions on the policy?
Knowing what’s not covered is just as important as knowing what is covered. For example, an insurer may not cover you if you are were to die whilst participating in a dangerous activity like sky-diving. Or, you may not be covered if you work in a hazardous profession, or if you have a pre-existing serious medical condition. The rules and exclusions may differ from insurer to insurer – ask your advisor to explain exactly what’s excluded so you can then compare policies with more clarity.
2. How long am I covered for?
Different life insurance products will cover you for different amounts of time. Ask this question to find out how long your policy will last. For example you might get an extra five years of protection from one policy compared to another.
3. Is the insurance fully medically underwritten?
Underwriting is the process where an insurer assesses your risk to ensure that the cost of your policy matches your risk of something unfortunate happening to you. It takes place when you submit your application – so, a ‘medically underwritten’ policy is one that has assessed your risk (usually via a questionnaire) when you sign up.
There are many general insurance policies in the market that don’t assess your application until claim time, which can be risky. Yes, these policies are often cheaper, but may not be what you need in the long run.
Any advice provided in this content is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice we give you, having regard to your personal situation, before acting on our advice or purchasing any product. iSelect does not compare all products in the market. Not all products are available at all times.
iSelect Life Pty Ltd – ABN 89 124 304 347, AFS Licence Number 331128. Any advice provided by iSelect is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice we give you, having regard to your personal situation, before acting on our advice or purchasing any product. You should consider iSelect’s Financial Services Guide which provides information about our services and your rights as a client of iSelect. We receive commission for each product sold.