While many Australians are drawn to cheap risk policies sold through the direct channels, Canstar says seeking the help of an adviser is important to avoid “inherent dangers” of the direct space.
In Canstar’s 2015 Star Ratings Report, the ratings house said that while increased accessibility to insurance products through direct channels is helpful, given Australia’s underinsurance problem, it comes with the possibility of consumers' being sold the “wrong product”, leaving them without the cover they need.
“The cheapest policy is not always the most appropriate,” the report said.
“Certainly price on day one is important but so is the price in the future and this is where the experience of a licensed financial adviser becomes invaluable.
“Good advisers will be able to look at different companies and their approach to pricing over a really long period of time,” the report said.
Canstar stated that it is “perfectly valid” for consumers to buy insurance without advice, but there are many people who “really need advice to avoid the inherent dangers in finding the right cover”.
“For instance, if the client has a pre-existing condition such as a back problem, an adviser knows which companies are going to be the most accepting when it comes to that condition,” the report said.
The report also included Canstar’s Star Ratings Awards, with TAL and Zurich both awarded top honours for providing outstanding value across their risk insurance policies.
“TAL impressed with its term life policy, maintaining low premiums for the 20s profile, while reducing premiums further for the 30s, 40s and 50s. The company also maintained its five star rating in all occupations and genders for level premiums in the 20s and 30s profiles,” the Canstar report said.
“Zurich Australia continues to shine with a combination of reductions in death cover premiums of 2.5 per cent for males under 35 and 5 per cent for equivalent females. The company also won five stars for 59 of the 64 profiles researched in the TPD category, charging the lowest premiums for 35 out of those 64 profiles and maintaining their strong position in the standalone TPD field.”
Canstar also named the award winners in the individual product categories:
Term life insurance: AMP and TAL
Income Protection Insurance: Macquarie Life and TAL
Trauma Insurance: OnePath and TAL
Packaged Life Insurance: OnePath and Zurich
TPD Insurance: ClearView and Zurich