If you are at home between the hours of 9 and 4, and you are tuned in to any television channel imaginable, then chances are that you will come across a message from one of the televangelist informercials relating to life insurance who seem about as sincere as Brittney Spears marital vows.

These ads generally promote that you can get life insurance for as little as $4 a week or something similar. However, what they don’t tell you is that the policy you can receive with someone else is far superior and less expensive simply by calling a regular life insurance company or an adviser.

When calling in response to one of these infomercials, you are still required to give medical details, unless ou are after a Funeral Plan (whose premiums are almost DOUBLE that of normal policies for that value).

So, here are the three reasons to beware of television life insurance offers:

1) The premiums charged almost 40% higher than normal policies

2) There are many exclusions such as conditions you have suffered in the last 2 years.

3) No advice offered

So, if you do feel the urge to contact these insurers after watching one of their promotional spots on daytime television, be sure to check with your adviser or do some more research.

PD

I’ve been asked by many clients and those outside of the industry about AIG, and their ability to service their current insurance book. Due to all the bad press they have received from the US and around the globe, there’s no wondering why.

We have dealt with AIG for many years now, and we have been notified that their balance sheets are in order, and must be according to the Australian Securities and Investment Commission (I’ll talk about this later in another post). They are also in the process of changing their name to AIA. This is solely due to the bad PR over the recent months, and with America’s ever downward spiralling economy, there may be more to come.

AIG held an industry meeting recently in Brisbane to give a run down of the new structure which included an outline of their separation to their US parent company, forming an independent unit for the Asia/Pacific region. This should give policy holders some additional peace of mind knowing that they are doing something to combat this crisis.

Their new name and brand will be AIA. They used to trade as this, but for some reason changed to AIG many years ago. But as far as business strength goes, AIG is as good as any other.

PD

It’s not a question that is posed in your everyday agenda of self-asking questions. But I’ve come across an interesting article relating to the average amounts insured for people in Australia. Why are women so underinsured?

This report states that the breakup of those who have personal life insurance is 72% male and 28% female. Now that’s a pretty big gap! Isn’t the general consensus that males are equal to females? (feminists, feel free to hollar AMEN!)

The other interesting point to come from this report is that the average insured amount is $525,000. Now, according to Residex, the average house price in Sydney is $565,000. This not only leaves a gap of $40K, but also a gap where the income needs to be supplemented somehow. Just think what is needed when one of the parents dies. The other partner generally has to take on the running of the household by themselves, and even take time off work to deal with the enourmity of the loss. This can lead to unemployment, bills falling behind, etc. It’s all well and good to pay off the mortgage, but what about everything else?

If you’re unsure of how much you need to insure yourself for, or ‘your worth’. See our other post at “How Much Insurance Do You Need” to help you.

So, if you’re thinking about insurance for yourself, also consider your partner aswell. There are many different ways to fund it if affordability is an issue. Look through this site for other solutions. Just don’t think that the main breadwinner is ‘worth’ it.

PD

Most people know how life insurance works. For those who don’t, it’s easy - If you are insured and die, you are paid the amount you are insured for.

There are two types of life insurance available today:

1) Term Life Insurance (choice of normal & accident only)

2) Loan Protection Insurance

Both of these have pros and cons. The easiest way to describe the differences is that Term Life covers you for your nominated amount. You can choose to be covered for anything between around $50,000 to $3M. All depending on whether you can justify that amount.

Loan Protection, such as Mortgage Shield’s Loan Cover Plus policy, is taken at time of acquiring a loan/mortgage. For yours and sometimes, the banks, peace of mind, you can take out a loan protection cover, which will also pay on death, but you can only select for the amount of the loan you have started. The good thing about this cover is that there is generally no medical questions or any complex paperwork. That said, the paperwork that goes with the Term Life cover isn’t at all complicated, just sometimes time consuming.

The best way to find out which type of cover is right for you is to contact your insurance adviser/broker and they will walk you through it. Normally, with all types of life insurance, you can either pay monthly or yearly, but you get about 1 month discount on the yearly payment.

PD