The perils of buying insurance online

Have you ever been tempted by the plethora of television ads promoting cheap online insurance?

Usually they spruik about being ‘easy, quick, requiring no health checks and acceptance over the phone’.

Sound familiar? Our industry calls them ‘direct to market’ products.

The truth is, that cheap do-it-yourself cover could come at an enormous cost to you and your family.

Consider this: After the 2011 Queensland floods, 25,000 Australians lodged a complaint about their insurer to the Financial Services Ombudsman.

He settles disputes over claims between clients and insurers.

Of those 25,000 disputes, only 6 involved a broker. The other 24,994 involved – you guessed it – cheap do-it-yourself insurance products.

The reason? Those people who purchased a direct to market product, didn’t understand what they were buying.

Navigating a Product Disclosure Statement (that tells you what you’re covered for) on your own can be a minefield.

Imagine shelling out for your premium on time, every year for 15 years, only to discover when it came time to claim, that your policy doesn’t cover what you thought it did.

And now in your time of need that policy you’ve been paying for all these years is now worthless to you?

If you know someone who is looking at buying insurance over the net, give them this caution: “Make sure you understand what you’re buying!”.