A number of people may have wondered what was behind the exasperated tone of my tweet on Friday afternoon. For those who missed it, it said:
If I had a penny for every time an insurance company gave me incorrect info about their own products I’d be a very rich man. Trust no one
Inevitably in my line of work there is constant interaction with insurance/investment companies on behalf of clients. Their products and propositions are fairly fluid and it’s the level of hidden detail within them which scares even the most financially astute person, and creates an industry for people like me to inhabit.
For example it’s easy to assume all life assurance products are essentially the same. Once you’ve seen one life insurance policy you’ve seen them all right? Well no.
When a product is at the design stage a number of people including actuaries will create something which is not only attractive to the public but also profitable. But to make it profitable they will need to have hidden terms and conditions which may exclude insurance claims on certain grounds.
The real problem is not the clauses themselves but the lack of knowledge of the people selling them. For example, on Friday I had a conversation with someone at an insurance company regarding their life insurance product. Now this person was not in a call centre, but on a sales team. Their sole purpose is to liaise with other professionals within the finance industry in order to sell the insurance company’s product. Now these guys (and girls) should know their stuff - so you’d like to think anyway.
To a cut a long story short, the man assured me that my client could get life insurance cover through them given his personal circumstances. It was an all singing all dancing product blah blah blah….
But as ever despite all their assurances I read through the products Key Features Document (basically the policy’s terms and conditions). And there nestled away in the small print was a statement that effectively excluded certain key benefits to anyone over the age of 60. How old do you think the client is? That’s right over 60. The insurer knew the client’s age in order to produce the reams of quotes and paperwork which were steadily filling my inbox – yet they still misinformed me! The sales guru made the mistake of assuming that the product he was pushing was the same as all the others he’d sold over the years.
What would have happened if I hadn’t checked the small print before agreeing to transact? Well, the insurer would have happily (and perhaps ignorantly) allowed the life insurance application to go through until hopefully their mistake came to light (at the 11th hour), inevitably causing major embarrassment for everyone involved including me. Perhaps more likely is that the insurer would have pushed on with the application oblivious to the misinformation I was given over the phone. Nobody including the client would have been any the wiser until such time as a claim was made and it was rejected.
Now I read small print for a living but what alarms me is the general apathy a lot people in the finance industry have towards detail. Whether intentionally or not there is an ethos that results and turnover are the be all and end all. And while people are rewarded on that basis, competency and due care will suffer. It’s not surprising that the finance industry has a history of mis-selling scandals (from pensions through to endowments). This money grabbing mentality almost brought down the banking system through the sub-prime mess.
How we're trying to change things
So what chance do ordinary people have (both wealthy and not) when trying to navigate an industry that doesn’t always have their best interests at heart? Well that is where Money to the Masses comes in. In some small way we’re hoping to break the mould and show that there is another way. We’re not claiming to be moral guardians but the fact that I’m writing this article at 11pm on a Sunday evening for free shows that I am at least trying to make a difference – and help people navigate their finances. All I have to offer is my experience, knowledge and the truth.
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