Insurance FAQ

Frequently Asked Questions

General FAQ

If the advice is free, how does Essential Financial Services support itself?

If you are referred to us there is no cost for our initial consultation – all of our advice is free of charge. No conditions apply and there are no catches. We will provide you with insurance quotes for free.

EFS is paid a brokerage by an insurance company if you decide to apply for the cover and if you are accepted. If you had gone direct to the insurance company and did all of the work yourself, you would still pay the same premium. The difference is we are highly experienced in insurance so we can make the job of comparing insurance companies and premiums that much easier and with much less hassle.

Will you come to visit me at my home or business?

Yes. Meeting with you, or both partners in a relationship, is vital when discussing personal risk protection that may affect the entire family. It is only fair for all concerned to have the same opportunity to learn their options and the benefits of having insurance. We are happy to make a time that suits both partners, and of course, our visit is free of charge.

How does Essential Financial Services reach clients?

Apart from our website, we do not actively advertise. Our business has grown from building strong business and client relationships while providing quality service and advice. Referral sources include our current clients, testimonials, accountants, financial planners, mortgage brokers, finance companies, and solicitors.

Which insurance companies do you compare policies from?

We compare policies from 10 different insurance companies:

1. AIA
2. AMP
3. Asteron
4. AXA
5. CommInsure
6. Macquarie
7. MLC
8. OnePath
9. Tower
10. Zurich

What kind of questions should I ask my insurance adviser?

If you are shopping around looking for the best insurance adviser, you might want to ask them a few questions:

• Are you with one big company or do you compare rates from a few?
• Will you be around when I need to claim on this policy or have any questions?
• Can I change my cover if my circumstances change?
• Can you provide me with real advice? Or are you just a call centre staff member?
• Do you specialise in risk insurance?

Why should anyone choose to work with an Insurance Adviser versus going direct to a large well-known insurance company? What is the advantage of using an adviser?

It begins with the ability to provide advice and assistance. An adviser wants to understand your situation and what you want to achieve so they can also provide some guidance and advice. When they understand your needs they can then match these needs with the most appropriate product and company that can achieve that for you.

Reassessing your cover in the future is also important especially as things change. An adviser can flag and monitor things that need to happen that will help you to maintain the most effective cover. Dealing with an adviser can assist you with any claim process you may need in the future. The right adviser will work for you, looking after your best interests, providing advice and guidance and the right adviser wants to be around when you need them.

The final point can really apply to anything or anyone; you don’t know what you don’t know. Deal with an adviser who wants to help you now and in the future will benefit you in the long run. The advantage is also that an adviser is always there and they understand you, your business and your needs on an ongoing and continual basis.

How can working with an insurance adviser versus going directly with a big insurance company guard against that?

All advisers have a “Duty of care”, and must meet the “know your client” rule so we pose questions and provide advice that will in the long run save you and allow you to make sure that the insurance you have taken out has a better opportunity to provide for you when you need it.

Does it cost extra to use an adviser?

You get better value for money using an adviser because the cost is included in the premium. By using an adviser you get a better chance of getting the cover you are after and your family needs. In fact, if you don’t use an adviser you are missing out on their advice, experience and expertise – especially when it comes to claim time.

Are all insurance advisers independent or are some locked into recommending a certain range of products.

It’s not so much about being independent its more about the number of different insurance companies an adviser has access to in being able to deal with your different needs and situations. You may find some advisers only deal with one, two or three companies. That can limit your options and scope of advice that can be provided to you.

What are the top 3 things someone should ask an Insurance Adviser (or indeed an Insurance company representative) before choosing them to manage your insurance needs.

1. Can you provide me with advice?
Are call centre operators order takers or can they ask me questions and give advice? Advice on different features and about different aspects of the products you need or is what they provide a very basic rigid product without the flexibility provide advice to service you particular needs?
2. Will you be around when I need you? Are you dealing with someone who is going to be around in 6 months time or 12 months time if you have a question problem or issue or heaven forbid a claim? Will they help you or will you need or will you be dealing with a different person every time you need something?
3. How many companies do you represent? You want to know if they are getting the most appropriate insurer for your needs.

What should people beware of when getting quotes online (without having spoken to anyone about their personal circumstances?)

The first question I would ask is; are they really getting what they expect to claim on? You don’t want to find out at claim time that you’re not covered because you didn’t fully understand a particular feature or exclusion in a policy.

For example what does a waiting period mean? Or is agreed value better than indemnity, or what happens if you reduce your benefit period. An adviser can also help you see things from a perspective you may not have considered or even thought about, especially if you are self employed. Do they really know what level of your business turnover you can insure and what parts you can’t? Do you know you can cover fixed operating cost with an addendum to your income protection? It’s about advice.

Some advice can really save some people some money and even potentially save them their house their business and their family. We have a report called the 13 Things You Should Know About Income Protection that most people will find very helpful.

What are some of the common problems people come up against when they do have to make a claim and find it gets rejected? What can people do to ensure they have the right cover with the right company? It can be very complicated can’t it?

My experience is that if a claim is denied in most of these cases it is denied due to non disclosure at application stage or alternatively it can be denied if someone tries to make a claim for something the policy does not cover you for. For example a widow trying to claim on her husbands accidental death policy after a heart attack.

Non disclosure is where an individual has not provided all the relevant information asked for on an application form especially about their medical history. The questions on an application usually ask have you ever had one of the following. So “ever” means even 20 years ago. So if there is something that happened 20 years ago you need disclose it when you apply for insurance. It doesn’t mean you won’t get cover.

Is insurance something you can set and forget or should it be reviewed annually or even more regularly? When should it be reviewed?

It depends why you took the cover in the first place but in my experience everyone should regular review their cover, especially when something changes in their life, like their income, marital status, children or dependants and debt levels. A least every couple of year s is s good idea. Companies also change their features and premium rates so you need to keep an eye on what they are doing as well. But changing companies is not necessarily the best thing to do for everyone.

What is our ‘Value Network’?

EFS is part of a Value Network consisting of a trustworthy group of professional businesses, such as accountants, business coaches, financial advisers etc. As our client, you will be able to access this network of recommended and trusted professionals free of charge.

Who is our Licensee?

Your advisor, who is providing your recommendation, is a representative of Charter Financial Planning (ABN 35 002 976 294), which holds a Financial Services Licence.(No 234665) .

Income Protection Insurance FAQ

How much does income protection insurance cost?

The cost of your income protection varies greatly according to your circumstance.

For example, if you’re a self-employed 40 year-old male earning $65,000 per year, it could range from $40 to $115 per month depending on the variables required. However, it’s important to note that the cost of your income protection insurance is fully tax deductible.

How many hours per week do I need to work to be eligible for income protection?

You’ll need to be working a minimum of 20 hours per week, and for some insurance companies, 30 hours per week.

How much of my income will be protected?

A maximum of 75% of the income earned by personal exertion after the deduction of any expenses incurred in earning that income, but before tax.

I run my own business. How does income protection work for me?

The definition of income for the self-employed is your share of the net income of the business (after deduction of business expenses) directly due to your personal exertion but before tax PLUS your share of any depreciation (excluding depreciation related to capital items used with the primary purpose of generating income) claimed as a business expense.

What’s a ‘waiting period’?

When you apply for income protection you’ll need to select a suitable waiting period – this is the period of time that you need to be disabled before you are eligible for a payment from your insurance company in the event that you make a claim.

How long is the ‘waiting period’?

Waiting period options vary from 14, 30, 60, 90, 180, 365 and 730 days. Payments from insurance companies are usually paid in arrears. Most companies pay their first payment to you 30 days AFTER the waiting period has expired.

Can this period be reduced?

Yes. The waiting period can be reduced with benefits such as the ‘Booster’ and for accidents only with an ‘accident benefit option’.

More questions?

Call us on (03) 9890 3388 to book an obligation-free appointment, or get a free online quote now.