Did you know advised individuals are more likely to be successful when making an insurance claim? Here’s why.

Different insurance policies cover you for different events. The right combination of insurance complements each other to give you protection for several different scenarios, which may stop you from working.

A financial advisor ensures you have the right insurance in the first place, reviews your policies annually to ensure they are still right for you, and is available for when you need help – especially when a claim needs to be made.

According to the Australian Securities and Investments Commission (ASIC), advised individuals making death benefit claims have a 97 percent success rate, compared with an 89 percent success rate for unadvised people.

When it comes to TPD claims, advised clients have an 81 percent success rate, while just 67 percent of unadvised individuals have their claims approved.

Broadly speaking, people who have obtained an insurance policy through a financial advisor or group super scheme (i.e., employer-sponsored fund or industry super fund) benefit from a higher percentage of successfully paid claims compared to people who try to go at it alone.

From the financial planner’s perspective, the following are the reasons why this is the case:

More total and permanent disability claims via advisors and group super

Clients have very low awareness as to what total and permanent disability insurance is. Total and permanent disability insurance provides cover if you are totally and permanently disabled. It helps cover the costs of rehabilitation, debt repayments, and the future cost of living said Andrew Zbik.

More disability income/income protection claims via advisors and group super

This type of insurance cover replaces the income lost through the inability to work due to injury or sickness.

With waiting periods and benefit periods varying wildly, how you set up your income protection will heavily influence how and when you can make a claim.

Source: Chris Hocking Strategies and Nestegg – Andrew Zbik, senior financial planner with Creation Wealth