Opinion: Overinsured and unhappy

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When incomes are shrinking clients with indemnity policies may quickly find that their income protection cover is miles above their pre-disability earnings.

Wednesday, March 3rd 2010, 5:30AM

by Russell Hutchinson

While many definitions mean that there is a long lag between income falling and this actually affecting the potential benefit, quite a few clients won't know that, unless you tell them.

The uninformed client creates two problems for you. One is the client that is looking to cut costs and wakes up with the bright idea that he or she is overinsured - and blames you for the oversight.

I know how this feels, last time I popped in to see the good folks at - we'll call them Profiteerphone - they proudly told me I could get more minutes, more data, and a better phone, all for half the monthly cost. They were surprised to have me frown and ask them when they were going to tell me...  well, they weren't unless I walked in and asked them. This is not customer service. I damned near walked across the mall and went to Nastyphone.

This is how your customers will feel if you don't talk to them about what's going on with their incomes and their income insurance. Educate them about the definition of pre-disability income and if they still want to pay less, help them do it.

Don't put your head in the sand because if they find out of their own accord, it won't be pretty. Oh, and the other problem you have... that's if another insurance broker comes across your client and points the problem out for them.

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