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Warning on online cover sales

IFA Master Adviser is warning brokers not to cut corners when selling life and critical illness cover or face the consequences.

Roy McLoughlin, senior partner at Master Adviser, says he is concerned that brokers selling life cover or critical illness online are either failing to get their client to fully disclose any medical problems or not getting the signatures to back-up any decisions that are made.

Non-disclosure could affect any future claim a client may make, with insurers refusing to pay up.

Failure to get a signature could mean brokers are leaving themselves open to claims for compensation from disgruntled customers.

Insurers have made the online underwriting process more efficient. However, the system will only work effectively if the broker sticks to the provider’s prescribed questions.
McLoughlin says: “A certain amount of underwriting can be done electronically but that is dependent on all the questions being answered.

“But if brokers don’t fully inform insurers of any issues involved with the client and get a signature, they could leave themselves open to potential claims.”

However, Sue Wilkinson, head of life and health propositions at Abbey for Intermediaries, says the online systems may actually operate as a stop and check.

She says: “The intermediary isn’t more exposed by applying online. With paper applications you can avoid filling in boxes but online forms will not allow boxes to be left blank.”

Wilkinson says the industry is developing more sophisticated and intelligent underwriting systems to speed up the process and ensure intermediaries are not exposed to any undue risk.

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