The economic downturn has meant significant budget cut-backs for most South African households. And, despite it being essential, insurance is inevitably one of the first areas to be downscaled or eliminated all together. Helen Szemerei, Director: Insurance Servies, IntegriSure, argues that consumers need to spend more time understanding the product and claim implications, or entrust these decisions to a reputable intermediary. They also need to start demanding the better deals to which they are entitled based on their responsible lifestyles and reduced risk profiles…
Insurance – no matter the category – is a complex product. When faced with a barrage of disclaimers and reams of fine print, most consumers’ response is to quickly sign on the dotted line and hope for the best. Very few of us as product-owners take the time to appreciate the implications of our purchase, usually only finding out what exactly we agreed to and what isn’t in fact covered on the day we try to claim.
The value of an independent intermediary’s advice therefore cannot be taken for granted especially in today’s bearish market. It also shouldn’t be immediately dismissed as “more expensive” based on misperceptions created by advertising campaigns. Consumers need to take the time to educate themselves and do the proverbial “shopping around” to test what is value for money when it comes to insurance and what isn’t.
The over 50 market in particular should be challenging misperceptions when it comes to their category of insurance. While most insurance providers will pool younger and older members together so as to cross-subsidise and effectively balance out “higher risks” with “lower risks”, this isn’t always the case. Older members can benefit financially by virtue of their reduced risk profiles and more responsible lifestyles – if they take the time to find a niche provider.
In the same way, promises of “no claim bonuses” should not induce a false sense of loyalty among this age group, where they effectively accept as opposed to question premiums they are asked to pay. In a situation where they are pooled only with members of a similarly low risk profile as at IntegriSure, premiums should effectively decrease rather than keep pace with inflation and the escalating costs of higher risk members. One therefore needs to demand that one’s premiums relate to one’s risk profile as one grows older, and that one isn’t “subsidising” younger members with less responsible lifestyles.
Knowing what you want and what you need therefore needs to be the point of departure for all consumers when reviewing or deciding upon their insurance cover. With so many products on the market claiming to be the “solution” to all one’s needs, it’s imperative that one not only demands the “best deal” from an insurer, but also makes sure that the service provider themselves is also reputable and honours claims timeously and efficiently; again where an intermediary’s expertise can prove invaluable and extremely cost-effective in the long run.
So, if you are fast-approaching or already over fifty, before being bullied into buying insurance take the time to either do your own homework, read the fine print and get comparative quotes, or enlist the assistance of a reputable intermediary. That way, you’ll ensure that your responsible lifestyle translates into real savings and money in your pocket – good news in these tougher times.