Last week a radio advertisement piqued my interest by offering the ‘perfect’ Income Protection Policy.

I reviewed their website and the product they are offering is a simple ‘Accident and Sickness’ style contract they have badged, that has been around for the better part of a hundred years. This product is a long way from being perfect. By way of an example, it does not cover mental health issues, which is now the number one claims cost for the Insurers that do offer a contract much closer to perfection.

Excluding these conditions that cause the most claims expense is a very profitable idea for an Insurer, but not a good deal for the Insured person paying the premiums.

Also, here’s a friendly little cherry I found in the small print too…

We normally act as your agent when dealing with Insurers. In some circumstances, we may act as an agent of the Insurer and this may be under a binder arrangement which allows us to offer, vary or cancel policies and manage claims as if we were the Insurer. When this occurs, we will clearly notify you that we are not acting on your behalf.’
So, you think you have an Adviser, but you don’t.

Consumers are being offered more and more ways to deal directly with companies, but the loss of that advice in between is going to be very expensive for some people. Sadly, at a time when they are most vulnerable.