News & Insights

Life insurance - what's the value of trust?

Published 16 March 2016

Recent media exposure of CommInsure’s alleged dealings with a number of trauma and total permanent disablement (TPD) claims raises the question of the role of the life insurance industry in protecting the customer in times of need and generally being there when it counts. As a specialist provider of advice in this area, we were disappointed to hear this news and will continue to monitoring events as they unfold.

With around 3 million policyholders, CommInsure is one of the country’s largest life insurance companies and part of a bigger brand family that people across Australia regard as their trusted advisor. Whilst we advocate taking a balanced view when these things happen – after all, issues in one part of a business don’t necessarily mean the whole of the business is doing the same – it does raise valid questions about into whose hands we place our trust.

Our perspective

life insuranceLife Insurance has one purpose and obligation to a policyholder – to provide financial security when life events place at risk the ability of your family and/or business to continue as you would expect them to. Essentially, it’s there to help people to put the pieces back together when the unexpected happens.

As a nation, recent research by Lifewise suggests that we are underinsured by more than $1.37 trillion. Rice Warner Actuaries estimates that underinsurance costs taxpayers $250m each year. Against this backdrop, claims exceeded $7bn in 2014. This means two things – 1) it’s important to understand early whether our current life and related insurances (income protection, trauma, TPD) will actually deliver what we expect them to; and 2) in the event that someone is no longer able to work through permanent disability, that the policy provides sufficient means to find a way forward.

Calls for a senate enquiry and the push for a Royal Commission are gathering momentum. What this means in the short term it's too early to say. What it does signal, however, is a growing view that the appropriate checks and balances may not be in place and that the industry is using outdated medical analysis and policy wordings that are out of touch with current medical technology and claims management practices. From our perspective, we welcome any review that identifies structural problems that may disadvantage consumers and that provides the opportunity to move forward and evolve.

Thankfully, the current CommInsure situation is not the norm. Life insurance companies do pay claims and behave with integrity to their customers. That said, from time to time unfortunate things happen, and when they do customers want to understand their position and what that means to them. That’s where we can help.

Gallagher Life Insurance Solutions – here to help

For any questions or concerns relating to your current arrangements, contact Mark Hutchison and our team at Gallagher Life Solutions. Call us today on 1800 466 842.

 

 

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