Insurance adviser or insurance broker, what’s in a title?

Quite a bit actually. “Are you an insurance broker?” is a very common question. Yes, sort of, is the answer.

That’s because, under the regulations we have, we’re insurance advisers, not insurance brokers.

What’s the difference?

With an insurance broker or any financial services broker, under the Financial Adviser Act, they are required to place your application with a minimum of 6 providers for assessment.

In the general insurance space, House, Car, Contents, Liability, Commercial, etc. it is very common to be in the position where a situation needs assessing by the underwriter just to get a price.

It is very common for your general insurance broker to be in this situation. It is often surprising to clients when it takes a couple of weeks just to get a price, as is often the case with liability covers.

When it comes to your NZ life insurance, which is where we play most of the time, the process is quite different.

We are in the position where we can ‘price’ a client’s base situation and provide a good idea of options, up front at the point of sale.

We often take into account the likely underwriting decisions from the underwriter and any pricing impact this may have.

From this, we can give an ideal option approach and have reasonable certainty about the cover offered, so it doesn’t warrant us submitting your application to 6 or more providers to get the ‘best’ answer.

If we were to operate in a brokered approach and submit your application to six insurers, five would do a whole lot of work for nothing.

This by itself would increase the insurers operating costs substantially and leave you paying higher premiums than you already do. Not to mention the additional costs our business would have to process all the additional paperwork.

With the typical life insurance application book having 30-40 pages and everyone is different, that’s an awful lot of paper work to submit six applications.

Now that we are progressing to digital storage we’re able to get a more accurate count on the size of client files. For an initial client on boarding, we are seeing from 250 pages of documents for a simple life only client through to nearly 1000 pages for someone looking at full coverage with financial statements and medical notes submitted.

Admittedly as a client, you typically don’t go through all of that, but we do on your behalf.

Additional to what we discuss, with your advice report, application and various supporting documents, there are our notes from discussions with underwriters. There is research to support our recommendation, different versions of cover options to attain the right structure and premium options. Not forgetting the checks and balances on the business side, to ensure we don’t miss anything.

Which is why you have a lot of trust in your insurance adviser, they’re doing a whole lot of heavy lifting in the background you just don’t see.

Imagine taking the approach of buying your cover from a website; you do the basics and choose a company, because of your mother’s or father’s medical history you get an answer back all of your covers are going to cost 75% more than you started with.

Now for most, they would throw their hands in the air and kick it to touch, or pony up and pay the increased premium, due to not knowing your options.

What you don’t know is that one insurer may be the only one to take that approach and the rest are their standard, though slightly higher than the one you picked, premiums.

Do you then submit another 4-5 40-page applications to find out or do you talk to an insurance adviser?

This is where a good insurance adviser can not only find the best option for you but also explain in simple terms why they are the best option and more importantly what it is going to do for you.

Many people we talk to have talked to insurance advisers in the past, some with cover and many without cover. The big thing that gets noted by all of them is they didn’t understand what they were looking at. It wasn’t explained to them in simple terms so they could decide.

We don’t have the simplest approach to life insurance, but we do have the most straightforward approach to delivering life insurance advice to you that you can understand.

Our primary focus is to get you to a point where you understand the risks you face, the best ways to manage and mitigate those risks, what insurance products could be used, and how much of them are required.

This puts you in the best position to make a well informed decision about what you need, and we then assist you in putting this in place.

Interestingly we do all of this for the same cost, which is the premium you pay. This is the same in New Zealand regardless of whether you buy from a website, a life insurance sales person selling you a policy or from us doing an in-depth analysis and report for you.

So do you want to chance it that you have it right with a website or a bank with only one option or do you want to get the right advice so you can make the right decision for you?

We physically operate out of Auckland, with advisers in Albany, Pakuranga, and Pukekohe, though with today’s communication options, we can help you anywhere in New Zealand.

Get in touch with one of our team today and finally get this off your very long to-do list!