Image
Icon

Directory

IconAppraisers and Valuers
IconAssociations and Institutes
IconBBBEE Consulting and Verification Agencies
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDefensive Driver Training
IconInsurance Brokers - Alphabetical Listing
IconInsurance Brokers by Type of Product or Service Needed
IconInsurance Companies
IconInsurance Consultants
IconLightning Damage & Surge Protection Specialists
IconMedical Rescue
IconOmbud
IconOnline Quotes and Cover
IconPremium Financing
IconPublic Loss Adjustors
IconPublications
IconRating Agencies
IconRegulatory Authorities
IconRisk Finance
IconRisk Management
IconRisk Surveyors
IconSalvage Operators
IconTelephone Quotes
IconVehicle Accident Management
IconVehicle and Household Risk Inspection Services
IconVehicle Tracking
IconWellness Programs
Image
  Subscribe To »

Professional advice crucial for comprehensive cover

Published

2012

Thu

22

Mar

 

The huge growth in the number of short term insurance products available to consumers has made choosing a provider a more confusing and difficult decision than ever before. As a result, the sheer number of options, coupled with a lack of bespoke financial advice, could be placing consumers at risk of inadequate cover.

 

This is according to Arnold van der Linde, Vice President of the Financial Intermediaries Association of Southern African (FIA) and Executive Chairman of IntegriSure, who says that as long as this myriad of product options exists within the short term insurance industry – and as long as the terms and conditions of a policy remain as complex – then a financial adviser is necessary to interpret these options for the consumer to avoid a financial impact if a loss occurs.

 

“A common mistake made by consumers when choosing a financial services product is to assume that they will pay more if they go through an intermediary. While financial advisers can obtain highly competitive quotes as a result of their collective bargaining power, it is vital that this is not the primary consideration when choosing a product.”

 

Van der Linde says it is important not to base an insurance decision solely on price, as this is likely to have a significant impact on the level of cover that is taken out. “Product providers offer different quotes based on the information given by the insured but the fact is that a lower premium often means a reduction in benefits offered.”

 

“It may be a cliché but with insurance you do get what you pay for. If any product provider offers to reduce a monthly premium, it is critical that consumers understand what this reduction entails. You may save a few hundred Rand a month by eliminating a car hire option or raising your excess, but if you have an accident this saving could be overshadowed by the thousands of Rands needed to hire a car and pay the increased excess.”

 

Van der Linde says increasingly consumers’ decision to purchase insurance cover is based on the perception of a cheaper premium created by huge publicity drives by certain insurers. “As a result, the consumer does not end up asking the appropriate questions to ascertain the extent of the cover they are obtaining. Consumers should not assume that all products offer equal measures of comprehensive cover.  Any business that wishes to rush the client through the process of obtaining a short term insurance quote with cheaper premiums and watered down cover should be strictly avoided.”

 

He says one of the best tools at a consumer’s disposal; however, are recommendations from friends or family. “The proof of the value of intermediated advice is in the annual policyholder growth experienced by professional financial advisors who do not gain market share through commercial drives, but rather as a result of word of mouth through thousands of satisfied clients.”

 

“However, when asking for advice from acquaintances, it is important not to ask how much they pay before a loss occurs but rather what they were paid afterwards. Claims experience is the ultimate test of the value of financial advice.”

 

“It is here that the value of independent and professional advice is critical. Consumers should ask themselves whether they are merely being offered a quote or whether their time is being requested in order to receive the most suitable advice,” concludes van der Linde.

 
Source: Epic Communications (Pty) Ltd
 
« Back to previous page Print this page » |
 

Breaking News »

A return to pre-crisis levels of global trade is unlikely but potential for growth exists

By Coface, the international credit insurer Following thirty years of unprecedented expansion, global trade is experiencing a period of radical change. Is the slowdown a cyclical phenomenon or long-lasting and ...
Read More »

  

The insurance implications of a multi-generational household

      Christelle Fourie, Managing Director MUA Insurance Acceptances       According to statistics from the The World Factbook, approximately 9 out ...
Read More »

  

Renting out your holiday home – what you need to know

Renting out your house as a holiday home has become a popular avenue for individuals looking to invest for the future; yet, while this may provide an attractive revenue stream, it is critical for such an asset ...
Read More »

  

Financial freedom to drive prosperity in Africa

Barclays Africa Prosper Report shows Africans would rather invest than spend money on luxury items to prosper To prosper, 53 percent of African respondents need to achieve financial freedom now and in ...
Read More »

 

More News »

Image

Healthcare »

Image

Investment »

Image

Life »

Image

Retirement »

Image

Quick Survey »

  Sponsored by
Image
Can there be fair discrimination in the workplace?



|Results »
Image
Image
Image
Image
Image
Advertise Here

From The Glossary »

Icon

Pure Endowment:

A pure endowment is a policy that only pays out a benefit at the end of a specified term. It can therefore also be called a savings policy. Should the policyholder die during this term the policy will only pay out the accrued value up to that point in time.
More Definitions »

 
 
By using this website you agree to the Terms of Use.
Copyright © Stoker Risk & ICT (Pty) Ltd 2004 - 2014.
All Rights Reserved.
Icon

Advertise

  Icon

eZine

  Icon

Contact IG

Icon

Media Pack

  Icon

RSS Feeds