Do I need an insurance broker?

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Gervasio, 25th Aug, 2021.

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  1. Gervasio

    Gervasio Member

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    Q: Do I need an insurance broker?

    D: In my mind, it seems like my situation is pretty simple to warrant a need for it. I also read the PDS for each of those insurances. Just would like to know your thoughts.
    • 2 IPs which both have building and landlord insurance.
    • TPD on super for each of us, me and partner which pays 250K lump sum. Before tax, I earn annually around 105K and 40K for my partner.
    • I am currently shopping around for income protection insurance for myself. This would be outside of my super.
    • We only have 1 car which has comprehensive insurance
    • health insurance (gold) paid for by company
    • currently renting
    • no kids
    Maybe, I need it but not right now. Thoughts...?

    Is there additional important insurance that I'm missing?
     
    Gervasio, 25th Aug, 2021
    #1
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Suggest the personal risk protection is a very different animal than all the others.

    Income protection/trauma is a major headache since the coverage and exclusions etc vary a lot per insurer.

    Many think this stuff is like comprehensive car insurance insurance ......its not

    How the cover is put together can also have a large impact on the post tax cost. Often a combo of Within Super and out of super provides the best cover at lowest out of pocket cost.

    Many Super based policies have 2 year payment limits on Income Protection.

    We have more than one client thats been on these for 10 years..........and would have been in strife if they relied only on Super based cover

    Suggest speaking with a good planner that does this stuff day in day out

    ta
    rolf
     
    Rolf Latham, 26th Aug, 2021
    #2
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  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Since insurace needs a AFSL that really something impossible to answer. I would argue a compete review of your insurances inside and outside super may be wise. And it may be imapcted by what sort of fund. Industry fund cover may be cheaper vs smsf. The amount of cover needs review to determine if its adquate or excessive. $250K of cover may be inadequate. A $250K lump sum when invested would pay $7K a year or less and do little to discharge debt or assist to compensate for lost income. Age health and more impact IP cover and its cost. And TPD cover alone may be useless if someone dies or ....its wording.

    Warning : Many insurance brokers arent financial advisers and are old school sales agents. A financial planner may approach this in a different way.
     
    Paul@PAS, 27th Aug, 2021
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  4. Ross Forrester

    Ross Forrester Well-Known Member

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    Your insurance broker can often arrange better policy wording than you get yourself by going direct. Also some insurers will only go through brokers and not have a direct presence.

    In the event of a claim the broker will also be able to assist. A large brokerage can, if needed, have a quiet word to a senior person at the underwriter.

    some general brokers do life insurance and some risk brokers do general insurance. I personally prefer to engage with a person who does one thing rather than somebody who specialises in everything.

    Ultimately it depends on if you value advice. A person going direct ultimately thinks the advisor is of no value.
     
    Ross Forrester, 27th Aug, 2021
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  5. Never giveup

    Never giveup Well-Known Member

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    Hi @Gervasio ,

    How did you go with your insurances? Did you speak to any Insurance broker or FA?
     
    Never giveup, 28th Feb, 2022
    #5
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