NSW Senator on underwriting at the time of claim: “a serious problem”
NSW National Party Senator, John Williams, who appeared before the Financial Services Council committee earlier this month, called underwriting at a time of claim “a serious problem”.
“I think that is a really serious problem when families take out their direct insurance thinking that the family is covered.” said the statesman.
His statement echoes the same concern raised by the Financial Planning Association (FPA), as well as the Association of Financial Advisers (AFA).
Underwriting is basically a process where the degree of a person’s risk is determined. This is essential to ensure that the cost of the premium and insurance coverage is proportionate to the risk that the individual concerned faces.
“For example, a bloke takes out insurance, he dies of a heart attack and they check out his history and find out that at two weeks of age as a baby he had a valve replaced, so they (the insurance company) are not paying. That is where I see a series of problems in the industry; which I think this committee must address.” said the Senator.
While there are direct insurance providers who underwrite at the time of application, this is not always the case for all insurance companies.
If you have any concerns regarding your insurances and would like to know more about how you can secure a stable financial future, you can contact McKinley Plowman’s Financial Planning division by clicking here.
Thinking about becoming a client?
Book your free, no obligation consultation right now at either our Joondalup or Perth Office via our online booking system or get in touch to find out more.
Already a client and want to get in touch?
Send us an email via our enquiry form or give us a call today.