Insurance
1/4/2017

Bank Life Insurance – Buyer Beware

Insured by a bank? It may be time for an insurance review.

We have all had the ‘would you like fries with that’ approach at the bank. Their staff are incentivised to sell insurance to customers often bombarding them with questions in an attempt to gain a sale. Generally, there’s a complete disregard of existing cover or pre-existing medical conditions.

Why would you take insurance advice from your bank teller? Would you take medical advice for chest pains from your local barista? Banking and insurance are like chalk and cheese. It’s unlikely you will get the right advice or products if you are buying insurance from a bank. Sadly, in the event of a claim, you’ll be directed to a call centre as opposed to having an adviser act on your behalf.

Bank Product Quality

Despite being similarly priced, most bank insurance  policies provide a poor level of cover when compared with independent life insurer products.

Information Non-Disclosure

Bank application forms are designed for convenience, not for obtaining all relevant information. They are sometimes only a few pages long. This leaves room for errors or missed information, which can result in medical non-disclosure and a declined claim.

Bank Claim Support

Generally, there’s next to no policy servicing, and minimal support at claim time for bank insurance customers.

Real Insurance Advice

Bank staff attempt to railroad their customers into taking up their cover – don’t feel pressured into taking up bank insurance – even if your home loan is with them. You are within your rights to shop around. Have an independent insurance adviser do the market research on your behalf so you can make an informed decision. They’ll give you access to all major insurer products, provide ongoing advice, and support you at claim time.

There are plenty of product quality comparison resources available. If you’re insured by a bank and concerned you’re not covered properly, please contact us for a free insurance consultation.

The opinions conveyed in this article are for general educational purposes only to provide information about the financial services industry. 

This information is not intended to provide specific advice or recommendations for any particular insurance, home loan, or investment product. You should not use this article to make any financial decisions, as we cannot assess your situation without thorough consultation. We highly recommend seeking professional advice from one of our qualified financial advisers. Get in touch on 0800 346 765 or email finsol@finsol.co.nz.

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