Accidental Cover Life Insurance
The royal commission this week is examining insurance companies and the direct outbound call centres that sell their products.
The Australian Financial Review reported that the Freedom Insurance company had sold more than 60,000 accident only cover since 2014, with only 55 claims during that time.
Startling statistics for sure.
The commission then went through the policy terms such as when the ‘accident’ cover would pay, or more accurately perhaps, would not pay such as from a helicopter accident, motor sport, working above 10m or anything directly or indirectly influenced by alcohol.
As advisers, we often do see ‘accident only’ insurance policies when clients first walk in the door.
They may be a relatively nominal cost, although not always. I have seen them promoted by credit card companies, health insurers, online TV advertisement offers or even shopping centre booths.
Yet as we have seen this week, the chance for claiming on some of these policies may be slim.
It pays to read under what circumstances the insurer will actually pay.
The good news is that we have seen many occasions where a guaranteed renewable, personal term life insurance policy will that pays upon your passing, whether by natural causes such as ill health, or an accident….at a cost that is similar to these accident only products.
If you have an accident insurance policy, I would strongly recommend that you have a look at the companies website to see what it covers.
Or feel free to send us an email with the policy – I’ve seen hundreds of types over the years, and can give you an outline to the pro’s and con’s of the policy you have.