The pitfalls of buying life insurance direct …
The Financial Standard recently reported that bad experiences with direct life insurance companies are tainting consumers’ views of life insurance in general, according to Synchron director John Prossor.
Prossor said that instead of turning to advice insurance after a bad experience with direct insurance, “most people end up thinking that it is not worth having life insurance because they have had a bitter experience.”
“We’re not comfortable about how direct insurance is sold at all because it is not underwritten at the time of sale,” he said.
As a result, “people think they’re covered when they might not be and because direct insurance companies do not ask about previous illnesses until claim time, clients find out that they are not covered when it is too late.”
Prossor stressed the necessity of raising consumer awareness about the importance of getting life insurance through financial advice, but he added that it is difficult for the industry to match the direct insurance advertising campaigns.
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