Is Online Life Insurance Safe?

There have been some discussions in the news recently. Is your online life insurance safe?

The Financial Services and Pensions Ombudsman released their Overview of Complaints and Digest of Decisions in March 2019. It’s a fantastic set of anecdotes and explanations of their decisions in 2018.

It also illustrates some of the problems being faced by insurance customers who have had their claims refused or policies voided due to non-disclosure when applying.

What are the biggest problems?

While some complaints are due to poor customer service, many relate to non-disclosure of material facts that may affect the likelihood of claim being paid. In some cases this may result in an insurance policy being voided, leaving the customer in a terrible position where they may not be able to get another policy.

A recent article in the Independent raised some excellent points about why you should be extra vigilant when making online applications, for all these reasons.

There is a rush in the online market-place towards speedy transactions above all else. At Greenway we built our site to walk a fine line between speed, and our due diligence to our customers.

How do we do this to make your online insurance safe?

  • Our site was built by a team with website developers and financial advisors. Fact-checking is built-in.
  • Our online forms are subject to oversight by a qualified financial advisor. Where we see the need for more information, we make sure to ask for it.
  • As lovely as seamless online transactions are, we’re very aware that buying insurance isn’t like an Amazon purchase. As financial advisors, we have an obligation to ensure that you have the correct information, and correct product to decide. This is why we’re involved in all aspects of the process, no matter how shiny our site looks!
  • Different insurers ask the same questions in different ways. Different underwriting teams have different priorities. It’s our job to know these differences, and ensure we get that information from you at the time. We check, and re-check, until the application is ready.
  • We know the forms are long. That’s why we’ve split them into easy-to-read sections, with questions in plain English as much as possible.
  • We also know your time is precious. You can stop in the middle of filling one of our forms and save your work for later. This is useful whether you need to check details, or just get on with a busy life.

Our ethos:

We’re about people. We want our customers to have access to protection products that fit their needs, and we’re willing to do the work to make sure that happens. The definition of an insurance intermediary (like us) is that we work for you, the client.

What can you do to check you’re getting the right advice?

  • Look past the quote. That’s just the price, you need to know what you’ll be paying for. Make sure you can see product details & an overview of the features.
  • Don’t leave anything out in your application form. Add everything you can think of, and ask us if you’re not sure.
  • Be honest about smoking! And obviously, try to quit ASAP.
  • Check the online broker’s Terms of Business. We keep ours here. Some online brokers are ‘Execution Only‘:

A service offered by Insurance Brokers & Agents whereby they arrange the policy on behalf of the customer, but without giving any advice. A service only counts as ‘Execution-Only’ if the customer specifies the product, the insurance company, AND has not received any assistance from the broker in choosing either the firm, or the product.

If you’ve got questions, about policies you think you need, or about your existing policies, contact Greenway. We will never advise you to cancel a policy that’s working for you. We’ll also never advise you to apply for a product through us that isn’t right for your needs.

Explaining Income Protection And Long-Term Renting

Whether you think rent is dead money, or a mortgage is lodestone around your neck, the chances are you’ll spend a long time renting. A recent article in the Independent says renters are incredibly vulnerable, post-banking crash. Can Income Protection help?

If you spend a lot of time on as a renter, one of the best ways to torture yourself is by making comparisons between the cost of your rent, and an equivalent mortgage. It’s a depressing calculation.

Renting Vs Owning

A mortgage holder has the option of serious illness insurance, and mortgage protection insurance, in case of serious illness and death. A renter may have no safety net in the result of a life-changing event.

The age profile and demographic of renters has changed considerably over the past decade. The media may portray long-term renters as young, but many of us are renting with families and responsibilities.

Recent reports show that some of us are paying up to 60% of our income on rent. Anything that affects our ability to work and fund that rental could be catastrophic.

Income Protection & Its Uses

Income Protection is a key strategy to ensure a long-term illness doesn’t derail your family, and future return to work.

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Income Protection is also known as Permanent Health Insurance. It’s a policy that pays out a benefit if you’re unable to work due to an illness or disability, and you don’t have a second job.

Your benefit starts paying out after the ‘deferred period.’ You select this period at the time you apply for your policy, so it’s typically 4, 13, 26 or 52 weeks. The shorter the period, the higher your premium will be.

For example, if your deferred period is 13 weeks, you must be unable to work for 13 weeks before the income protection payments begin. To decide your deferred period, check if your employer offers sick pay, and if so, how much and for how long.

How To Decide On Income Protection?

Is Income Protection the right choice for you? Well, if you:

  • Are self-employed;
  • Won’t receive sick pay from your employer;
  • Don’t have ill-health pension protection;
  • Have dependents who rely on your income;
  • Have no other source of income;
  • Don’t have sufficient benefits to replace your lost income or cover your expenses,

then yes, I think it’s worth looking at.

Before You Apply…

Some employers will offer access to a group Income Protection scheme, but you can take out an individual policy. The cost of your policy will mainly depend on the level of your cover (percentage of income), the deferred period you choose, and the term of your policy.

Aside from the usual factors of age, health, medical history and lifestyle, your job will also affect your premium. Different types of employment are defined as classes between 1 and 5, as some jobs are riskier than others.

For an example, Sinead and Simon are both renting for €2,500 per a month. Like many people, they’re spending over 30% of their income on rent.

Illness Lasting Less Then 6 Weeks

Income Per YearSineadSimonTotals
Full Time Job€36,000  
Full Time Job €30,000 
Total Income  €66,000
Annual Cost Of Rent  €30,000
Cash Remaining
(€3,000 per month)

Sinead earns €36,000 p/a, and Simon earns €30,000 p/a. If Sinead was to become ill and unable to work, she would receive 6 weeks of illness benefit from her employer, and the state illness benefit of €198 per week. (This is deducted from her illness benefit from her employer).

Illness Lasting Longer Then 6 Weeks

After the 6 weeks, Sinead’s employers illness payments would cease. This would leave Sinead and Simon’s annual combined income of €40,296.

Income Per YearSineadSimonTotals
State Illness Benefit
(€198 x 52 Weeks)
Full Time Job €30,000 
Total Income  €40,296
Annual Cost Of Rent  €30,000
Cash (€858 per month)  €10,296

Their rent per year is €30,000, leaving €10,296 for all other bills throughout the year. That’s a scary €858 to live on per month.

Neither Sinead, nor Simon, have family in the county, so moving in with their parents will prevent Simon from working, and Sinead from taking up her job again after her illness.

With Illness Protection In Place

If Sinead has an Income Protection policy, she can insure up to 75% of her earnings.

She pays PRSI, so she is eligible for State Illness Benefit of €10,296. If she insures an income of €20,000 for 20 years, after a deferred period of 8 weeks, Sinead and Simon will have a combined income of €60,296 p/a.

This will leave them with a monthly income of €2,524, a jump of €1,666.

And the cost to Sinead per month for this policy can be as little as €41.27 per month, if she is accepted on standard rates.

Income protection for renters is a sensible choice. Especially if you have no other accommodation alternatives like been able to move in with family.

Everyone should explore the expense & benefits of insuring the cost we all pay each month for our homes. This applies equally whether you’re a renter or a home owner.

Contact us today to find out how Income Protection can protect your rental home.

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Whats Included:

Different types of mortgage protection policies.

Where to buy mortgage protection.

Features of each seller & much more.

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