What You Absolutely Need to Know About Personal Risk Insurance
Do you realise that $1.6 Billion a year of personal risk insurance is purchased annually via consumers responding to direct media advertising. Many of these consumers are also small business owners and members of their families. However, this apparent safety net that many business owners and their families genuinely need may be extremely flimsy.
As a television viewer you realise there is plenty of money in a product or service if there is a lot of money spent advertising it. Gambling ads immediately come to mind.
Personal risk insurance is purchased just in case things go wrong and business owners can’t generate income as they can’t perform their job. Remember business owners don’t have sick leave, annual leave and long service leave to fall back on unlike their employees. So it makes sense they purchase personal risk insurance to protect themselves and their families.
The direct insurers make it easy for business owners who call them up. They don’t undertake any medical tests at the point of application. However, this is a major issue. The law requires anyone applying for personal risk insurance to fully disclose their current state of health, if not, should a claim be made it could be denied as a pre-existing medical condition wasn’t divulged. So a business owner could think they are fully covered, pay insurance premiums for years, then make a claim and find out the insurance company won’t pay because they had forgotten to disclose a pre-existing medical issue, for example diabetes.
To ensure our business owner clients get paid we spend quite a bit of time ensuring all their pre-existing medical circumstances are documented. At claim time we want the insurer to pay out.
The key to ensuring you get paid is to fully disclose your current medical condition. If you can’t recall when you saw your doctor over recent years, call their rooms and get the information. You don’t want to give an insurer a reason to decline payment, at the very time in your life your business and family need the safety net you put in place and paid for.
Should you as a business owner respond to these TV ads, ask the call centre when applying, under what circumstances is a claim rejected due to medical non-disclosure rules. Record the answer the call centre consultant provides including their name, and the date and time of the call. Also, get them to send you a copy of the medical statement you gave them to ensure it is correct.
The government body that regulates life insurance companies recently reported that one of the direct personal risk insurers wasn’t paying about 50% of all claims, the industry average for policies purchased via an adviser is less than 10%. So please don’t get caught at the very time you need the safety net you have put in place to deliver.
If you ever respond to one of these TV ads because you want peace of mind for you and your family, remember to fully state your present medical situation. If you fail to do this accurately you could have purchased something that will never pay out.
If you want to avoid a horrible outcome at the very time you and your family need a personal risk insurance policy to live up to its promise, get advice from an expert rather than simply responding to a TV ad.
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