Low cost insurance could have a hefty price

How opting for non-underwritten quick and easy life insurance could see you end up paying more for weaker cover.

Source: Chatswood Consulting, written by Jenee Tibshraeny on interest.co.nz about the differences in quality and coverage on underwritten versus non-underwritten life insurance.

An insurance expert has issued a stark warning, you’ll pay a hefty price if you opt for quick and easy ‘no questions asked’ life insurance.

The independent insurance product research firm, Quality Product Research, has found life insurance products that don’t require you to answer a raft of questions about your health, lifestyle and job before signing up, could be nearly 70% more expensive than fully underwritten products.

Furthermore, its chief executive Alan Rafe has found the quality of their cover is much lower.

Sovereign for example, which also distributes its life insurance products through ASB and State, has two main life insurance offerings: TotalCareMax and Simple Life.

TotalCareMax is fully underwritten, while Simple Life isn’t. This is how their covers differ (policy documents available through links):

Sovereign clearly spells out all these differences on its website. It provides detail on Simple Life’s broadly encompassing hazardous activity exclusion in its policy document, which you can only see once you endeavour to get a quote.

Despite logic assuming the more comprehensive policy would be the more costly one, Rafe’s research indicates that on average, Simple Life is 68% more expensive than TotalCareMax.

Click here to view the full article on the Interest.co.nz website.