Potential ASIC crackdown on “Car Yard” Insurance
In Australia, the majority of life insurance policies are sold through superannuation funds, financial advisers or online websites. Some of the major insurers include AMP, TAL, CommInsure, MLC and AIA. However, many car dealers are also providing life insurance to their customers as an add-on.
Recently, it has come to ASIC’s attention that some car dealers are charging 18 times more for life insurance than other providers. ASIC is now calling for insurance providers to make substantial improvements in the design and distribution of these products. The providers will be required to address the high costs of their add-on products, especially where they provide alternative products for lower costs with more comprehensive cover.
ASIC found that the average policy purchased from a traditional provider in Australia will set you back about $987, whilst a car yard life insurance product might costs around $1492. Keep that in mind the next time you are offered to buy life insurance from a car dealer.
If you require any further information in relation to the above, please contact The Quinn Group on (02) 9223 9166 or submit an online enquiry form today.