Insurance, Group vs Retail Vs Direct

When purchasing insurance policies most people are decerning in the type of insurance they are choosing. However, they are often somewhat unaware of the source they are purchasing from? Many people just figure that all companies selling insurance policies must be roughly about the same, with price being the only difference?

In reality this is not the case. Different providers operate very differently, and the differences can be very important for consumers—especially when it comes time to claim on a policy.

Let’s delineate the three main streams of insurance sellers, so as to arm you with more information in choosing your provider.

The first type we will look at is what’s known as direct insurance sellers. In this scenario you purchase directly from an insurance company without any intermediary advising you. You might do so on-line, or you might deal with a phone salesperson who works exclusively for that one company you have contacted.

Importantly direct insurance is not what is termed “medically underwritten” unlike retail insurance which we will look at later, and this can sometimes restrict what you can claim for.

Many people are attracted to purchasing a direct policy because of the apparent simplicity and ease of the process, but they should be very certain to read the product disclosure statement thoroughly from start to finish so they don’t get any untoward surprises come claim time. These PDS’s, can sometimes be dense documents to get through, written in a semi-legal language that is not to everyone’s liking. This is why many people turn to experts like the qualified insurance specialists we have on staff at SMFS Insurance Partners.

So, with direct cover be aware that, these types of policies often have built in exclusions and can also be more expensive than retail policies.

The next avenue of purchase is through a group provider—and this is exactly as the name would suggest. It is an umbrella arrangement where purchasers are grouped together by being employees of the same organisation or members of the same superannuation fund. Certain blanket assumptions may be made by the insurer around occupational risk, and a predicted general state of health of the group based on age and occupation.

This can mean that you find—unlike a retail policy, where you are providing detailed information about your life and health situation—the group policy does not reflect the detailed policy requirements you really need to be completely comfortable. However, if you have not been able to find approval for a retail policy, a group policy can definitely be a viable second option.

Two additional important considerations in regards to Group Insurance Policies are:

  • Group cover generally expires at age 65, whereas retail cover can be accessed up until 99 years of age.
  • Group policies are not automatically guaranteed to be renewed.

This of course leads us to retail insurance policies, the type our team at SMFS Insurance Partners most often deal with. In this scenario you sit down with a qualified consultant, who has access to a complete market place of insurance providers all effectively competing through SMFS Insurance Partners to be your insurance provider.

Yes absolutely we do take a bit of time in taking you through the questionnaire process regarding your lifestyle, occupation, and medical history—and we’re proud of this approach. Health, age and lifestyle are key factors in building a profile of you that helps us find the most appropriate insurer and policy or policies for you. We find that time well spent with you at this point, means we can nuance a policy more effectively to your needs and what is most important for you. In general, you want the most complete cover possible, for the budget you have allocated, and you want to minimise any untoward surprises arising during a claim.

Of course price is always an important consideration, and we will always make sure we provide you with the most competitive and cost-effective solution in this regard.

If you would like some more advice around what’s been detailed here, please feel free to contact one of our friendly informed SMFS Insurance Partners consultants on (07) 3064 0413, or contact us via the convenient messaging section on our website.