The $67,000 Insurance Policy?

Scott,

My husband and I are in our early fifties and earn $100,000 combined a year. We paid $67,000 this year for life insurance, including critical illness and income protection. And we have now been notified that my husband’s super is all depleted as the payments were auto-deducted from his super! We thought everything was okay, as we have been with our financial advisor for 28 years. Now we don’t know where to go to get out of this costly mess. Please help!

Renae and Peter

Hi guys,

You have every right to feel stressed, and as angry as an alpaca!

My advice?

You need to get a bit of alpaca attitude and stomp and hiss and spit until you get this sorted.

On your income – and presumably your super fund balance – it is totally unacceptable to be paying $67,000 for an insurance policy. It’s absolutely ridiculous. It’s simply draining your super fund.

Now I understand I’m only getting your side of the story, but if your financial advisor of 28 years has overseen this – and profited by pocketing thousands of dollars in trailing commissions – they should be held accountable.

Here’s what I’d do if I were in your shoes.

First, gather up all your supporting documents: insurance records, emails from your advisor, statements of advice (SOAs) and payment records.

Second, write about the emotional toll this is having on your family. Be as raw and emotional as you want. Bleed on the page. Get it all out.

Third, bundle it all up via email and take the following four steps: 1) Email it to your financial advisor’s compliance department ‒ you’ll get the contact details in their Financial Services Guide (FSG); 2) Lodge a complaint with the Australian Financial Complaints Authority (AFCA) at afca.org.au; 3) Send it to a good lawyer; 4) Finally, send it to the compliance department of the insurer you paid $67,000 to.

Remember: be an alpaca. Hiss, spit and bite if you have to. Don’t take a backward step.

Scott