None of us ever really wants to be in a position to have to make a personal insurance claim, as it could mean something unfortunate has happened, however in our lifetimes it is likely we may fall in that position.
Here’s five reasons why you should seek guidance first from a financial adviser when making a personal insurance claim re: life insurance, total and permanent disablement cover, income protection or critical illness/trauma cover.
- Advanced product knowledge – insurance specialist financial advisers have high level insurance product knowledge given the fact that they are often the ones recommending/advising individuals to establish cover to help mitigate impact of financial risk. They are the ones dealing with it day in day out. They understand the processes, they understand the options and are experienced with claim processes across a broad spectrum of insurers.
- Relationships – insurance specialist financial advisers already have pre-existing relationships with the insurers. In many cases advisers have access to dedicated claims officers, dedicated underwriters, dedicated business development managers (and where required, access to state managers) working closely with them to get the best outcome for clients.
- Lower costs – in most cases the costs of engaging a financial adviser to execute/assist with any potential claim is more cost-effective than engaging a solicitor/lawyer. In fact, if a financial adviser assisted in the establishment of the insurance policy it will quite often factor in the cost of a claim into the existing remuneration structure.
- Ancillary /inbuilt benefits – many quality policies offer additional financial planning funding benefits for individuals, at no extra cost, to engage a financial adviser to assist with structuring claim benefits. There can also be crossover benefits in which a financial adviser will be able to assist with claiming i.e. an income protection policy may also have a trauma or death benefit inbuilt which can also be claimed upon, these are not always picked up on.
- Strategy advice – insurance claim proceeds are not always tax-free, however there are a number of strategies to help reduce the impact of taxation which need to be factored in. These strategies require the professional who is handling of the claim to be licenced to provide personal financial advice (an authorised representative of an Australian Financial Services Licence and be licenced to provide limited taxation advice re: a member of the Tax Practitioners Board) in order to provide the personal advice.