If you are looking to buy insurance or make an investment, don’t get caught out by the small print.
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We all lead increasingly fast-paced and busy lifestyles and can all be guilty of glossing over things due to not having enough time. We are all prone to ignoring the small print and agreeing to terms and conditions without reading them, especially now that the Terms and Conditions are often a tick on a computer screen.
Whilst this may not be a major issue when downloading an app or ordering something online, we are certainly leaving ourselves wide open when it comes to insurance, especially if buying online or from a store card special offer. In these cases, the terms and conditions can be very well hidden and furthermore, the unfair contract terms, as set out in the Fair Trading Act 1986 (Section 26A) excludes many insurance policies. A few months ago we were approached by a lady who lost part of her leg in a motorcycle accident and was off work for a considerable time.
The good news was that she had insurance in place to cover her mortgage payments (which she had bought direct). The bad news was that one of the terms and conditions hidden away under her policy was that there was no liability on the insurer to pay out if she was also in receipt of any ACC benefit. THE END RESULT WAS NO CLAIM. And this was from a well-known insurer. It left the client in quite a state.
We have seen other unfair wording as well. Many bank products have small print that states they will not pay out life insurance if directly or indirectly linked to war, invasion, terrorism, civil war, revolution etc., etc. So you go overseas and die as a result of a terrorist activity then your family may not be entitled to a pay-out.
So how do you avoid this situation? Well basically we would say don’t buy insurance online or without face-to-face advice. An Authorised Financial Adviser will be aware of the quirks of individual contracts and the small print on contracts such as disability, trauma, medical and income protection type products vary tremendously.
At the end of the day we all take out insurance for the assurance that a claim will be approved at the very time when financial assistance is needed. As we always say, plan with Foresight, so give us a call and we can help you understand what you are covered for and to make sure there are no hidden fish hooks in there.
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