June 6, 2017
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 (5%)
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…