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Latest Poll – Consumers Will Pay More for Life Insurance Solutions

Will new clients pay more for life insurance advice solutions under the Life Insurance Framework reforms?

  • Yes - they will pay more (77%)
  • No - they will pay about the same (13%)
  • No - they will pay less (6%)
  • Not sure (4%)

Our latest poll result suggests most advisers are predicting there will be an increase in the cost of life insurance that will be paid by the consumer post the introduction of the Life Insurance Framework reforms.

As we go to print, almost three-quarters of advisers (72%) say they think new clients will pay more for life insurance advice solutions under the LIF reforms. 15% think prices will stay about the same and only 6% think the end cost to the consumer for life insurance solutions will come down as a result of the implementation of the reforms.

…an element of scepticism exists in some areas of the adviser community as to the ability of life companies to ‘come to the party’ in delivering more cost-efficient processes at policy commencement

Feedback we’ve received so far suggests an element of scepticism exists in some areas of the adviser community as to the ability of life companies to ‘come to the party’ in delivering more cost-efficient processes at policy commencement, where most of the adviser’s expenses are generated, to compensate for a reduced maximum upfront commission cap that forms a part of the LIF remuneration dictates.

This poll was released based on initial findings from the 2017 Investment Trends Planner Risk Survey, in which early findings suggest many advisers will be charging more for their services as a result of the implementation of the LIF reforms.

The outcome from this Riskinfo poll suggests advisers think this additional advice charge will not be balanced by lower premiums, meaning the client – the consumer – will ultimately be paying more under the LIF reforms for the same life insurance advice services and product solutions that are delivered today.

Whether this adviser sentiment will be borne out will only be known once the LIF reforms have been implemented and we will monitor and report the ultimate reality of this question over time.

Meanwhile, our poll remains open for another week if you’d like to add your own contribution to this discussion…

  • Ken

    I think the poll speakes for itseft !!
    Be it a fee from the adviser or a premium increase from the insurer
    Nothing is Surer apart from Death and taxes ! things ( premiums) will not stay the same The so called claims experience will drive the increase ?
    . To any insurer who can work out a reasonable premium reduction based on the claims probability of say income protection ( say a reasonable financial approach to the short term Accident option) where so many claims come from) we could have these areas covered by additional premium costs (eg Accident options and other short term payment abilities )! its obvious extended claim issues will gain a big foothold in the market as people are working out how to stay in claim short ones can be disasterous as there are so many that give the unscrupulous client the option to take a few weeks off and get their annual premium back. Work it for life with the assistance of the never ending line if solicitors and it’s hard not to increase costs
    Life cover is simple people today survive many life threatening issues that 20 years ago would have killed you sooner rather than later
    It’s hard to accept in any way that premiums will reduce in any area without specific diagnosis of the occupation and the current claims experience.
    Basically let’s cut any possibilities of a major insurance premium out of contention
    Good business sense I guess ??
    Big in the end who pays the price?
    The honest hard working client