You cannot deal direct with the life insurance companies for income protection
Life insurance brokers can often be the best method if you are only trying to establish life cover and no other financial services
Check what cover you have under superannuation, and what options are available to you
Be aware of unlicenced people that sell your personal information to brokers
Other Useful Pages:
How to Establish Income Protection
Going Direct:
Unlike General Insurance Companies (car, house and contents cover etc), Life
Insurance companies do not deal direct with the public (life insurance companies
are when you obtain income protection). If you call a life
company requesting cover they will pass your details onto an agent or
financial planner of a related company to help you with your enquiry. Therefore
for you life insurance requirements you need to look at other avenues.
Financial Planners:
If you have seen a financial planner and been provided a full Statement of
Advice (SOA) you will finds that insurance recommendations are contained within
this SOA. Financial planners must examine your insurance requirements as part of
a complete planning service.
Financial planners offer a wide range of services, including insurance. However some planners predominately work on the investment side of planning, and do not want clients for insurance purposes only. You can always call a financial planner to see if they an assist you. Be aware that many financial planners will have a preferred list of insures that they deal with, and therefore may not be able to compare every company for you.
How to Contact
Usually the best method of finding a financial planner is through word of mouth, ask your friends and family if they have an adviser, and if they do what their experience has been like.
Life Insurance Brokers:
If you are seeking life insurance only, they perhaps a place to start is with a
life insurance broker. As always make sure that this broker is licensed and has
an AFSL Number.
When dealing with a broker ask them how many insurance companies they actively deal with, typically this will be 5-8 companies. Sometimes you can find a broker that will deal with every company, however only larger brokers tend to operate in this fashion.
When choosing a broker it can be important to choose a larger company that might have more influence with the life insurance company that your business is lodged with. This can be of a great help in the event of a claim, a larger broker that provides high volumes of business to an insurance company can exert a lot of pressure to get claims paid for clients.
To put it in simple terms, try to use a knowledgeable professional who can understand your needs and constraints, answer your questions, and help you find the most appropriate solutions
How to Contact
If you want a local broker that you can meet with face to face the best place to start is probably the Yellow Pages. Alternatively if you would prefer to not meet with a broker you can consider an online broker, some useful links may assist in this area.
Cover Under Superannuation:
Many people have life cover under
superannuation. Under superannuation you can establish life and TPD cover (not
trauma) and all people should check with their superannuation fund to see what
cover is available and what the premiums are before looking at external policy
options.
With cover under super there are a couple of things to be aware of, some funds
will let you have a specific amount of cover based upon your age, and as you get
older the amount of cover that you can have automatically reduces, this may not
suit everyone.
Payments of death benefits from superannuation will only be tax free if paid to a dependent (spouse or child). If the proceeds of life cover are not to be paid to a dependent external life cover may be a better option.
Cover under superannuation will have an expiry date of either age 65, or age 70 depending on the fund. External cover can be continued up to age 99, this is another factor to consider when thinking about how to establish cover.
If you change super funds you will lose your life cover.
How to Contact
Simple call the number on a recent superannuation statement, or speak to the human resources department of your employer.
Traps:
Be aware that some companies may appear to be able to assist you with your life insurance requirements, when in actual fact all they are is a service to connect you with a local adviser. They act as an intermediary that will collect information and sell your personal details to an adviser. They are not licensed operators and the key method of telling whether these companies provide you with advice or not is if they have an AFSL Number (Australian Financial Services Licence). If they do not have an AFSL they collecting your details to sell to others. These types of operators should be avoided, you are better off simply looking in the Yellow Pages to contact a local broker directly.
How to Avoid
Most of these companies operate websites promoting life insurance, if they do not have an AFSL clearly displayed do not submit your details.