New research from Zurich quantifies the amount consumers will pay for life insurance advice, but also reinforces the fact the majority are unwilling to be out of pocket.
The Risk Advice Disconnect whitepaper revealed a minimal number (8%) of consumers will pay more than $1000 for out-of-pocket life insurance advice.
Almost a third (30%) said they do not want to pay a fee at all. When asked if participants would pay $2000 or more for life insurance advice, 100% said, 'no.'
Of the advisers who took part in the study, two thirds charged $2000 or more for life insurance advice.
Zurich Life & Investments chief executive Tim Bailey said consumers' willingness to pay for out-of-pocket life insurance advice spans a number of countries, typically driven by financial constraints.
"To the extent that demand for life insurance generally coincides with major life events, for example taking on major debt such as a mortgage, or the birth of a child, we often see the paradox that the time when cover is most needed is also the time when household finances are most challenged," he said.
Bailey said life insurance is not without its complexities, and some of the commentary heard since the financial services Royal Commission highlights a genuine lack of understanding of the sector and the interplay between the major channels and product types.
"For example, an appreciation of the differences between group and retail, the dynamics at play, and the role each plays in delivering positive consumer outcomes, does not seem to be evident in many discussions."
While Zurich supports the Royal Commission's recommendation that any consideration of life insurance advice is undertaken in 2021 as part of the ASIC review of the Life Insurance Framework reforms, Bailey said collaboration between regulators, policymakers, financial advisers and insurers is essential to ensure the review will help determine the choices consumers have in accessing expert help with life insurance is robust and comprehensive.
Zurich surveyed 1000 consumers' attitude towards a range of issues relating to life insurance advice with the help of Rice Warner.