Four years on…its Happy Launchday!  When we launched this blog on 30 April 2007, we said;

“The Life Insurance Blog has been created to demystify life insurance for consumers by providing insight and advice as well as generating debate and conversation about all things to do with life insurance.”

“Whilst life insurance is a serious business and something we all need at some point in our lives, it is essentially a simple commodity.” (…honestly, your family receives a big cash payment when you die… how simple is that?)

We also said;

This blog isn’t going to be your top entertainment site on the web, BUT if you’re thinking of buying life insurance there are some things you’ll want to know.”

“When it comes to life insurance, Pinnacle Life is for the consumer. We’re not here to sell you a product or extras that you may not need. We’re about cutting through the insurance mumbo jumbo, getting the price down and cutting out any middlemen that don’t add value.”

Well, four years down the line and we haven’t changed our pitch. This still pretty much sums up Pinnacle Life’s approach to the business of life insurance.

We want to thank the regular readers of our blog and also the many people that have gone on to buy life insurance from Pinnacle Life through the Pinnacle Life website. You’re why we do it.

Well, according to this article, the payment of commissions to life insurance salesmen in Australia will end in 2013. This is part of the reforms that are to take effect in the Australian life insurance industry. The ban on commissions will also extend to bonuses for sales volumes.

So why are we mentioning these Australian reforms on our NZ blog? Because we were wondering what would happen if NZ followed Australia’s lead on these reforms.

Insurance companies typically pay insurance advisers over 200% of the first year’s premiums for each policy sold. This means that all the premiums that you pay for the first two years of your policy go to the adviser and these costs are built into the insurance premiums that you pay. The commission percentage can be even higher, depending on the number of policies that an adviser sells in a year.

If insurance companies were no longer permitted to pay advisers a commission, what would happen?

Advisers would have to charge their own fees and this fee would be itemised separately from the insurance premiums, and would no longer be a hidden cost. In effect, the price of insurance would go down and you, the consumer, would be able to decide how much you are prepared to pay for the advice.

So, how do you put a value on ‘advice’?  How much would you be prepared to pay an adviser to tell you how much insurance you need or which product to buy.

What’s changing the game is ‘online’ life insurance, where you can buy life insurance without ‘advice’. Consumers can now go online and research products in their own time; they can review insurance companies, read through policy wording, compare quotes and complete their online purchase, all without an insurance adviser holding their hand.

So, in an emerging online world where so much information is essentially free what value and price would you put on ‘advice’.

The Pinnacle Life website has been awarded ‘Official Honouree’ status at this year’s US-based Webby Awards.

Pinnacle Life sells life insurance direct to consumers online via an easy-to-use website designed and implemented by Intelligent Life Limited. The Pinnacle Life website has already won six major international awards for design, innovation and use of plain English. This latest award rounds out a period of four years since its initial launch in April 2007.

The Webby Awards are regarded by many as the ‘Oscar’s of the internet industry.

According to The Webby Awards website, there were almost 10,000 entry nominations this year received world-wide from over 60 countries.

The ‘Official Honoree’ distinction is awarded only to those websites exhibiting “remarkable achievement”, amounting to less than 10% of all websites nominated.

Hearing the spiteful and snide remarks, I’m always amazed at how some couples remain married. It’s not that they have never thought of divorce, they probably think about it daily, the glue to keeping these unions of unhappiness together is the power of the mighty dollar. It’s a fact of NZ marital life, separate and your dollar you once owned, now becomes 50 cents. In losing one problem, you gain another. You get to keep the house …. only now you have twice the mortgage.

Divorce is never pretty, and there always seems to be one party that comes out the other side better off. So you split the assets 50/50 but ultimately the winner is that person whom is able to generate more wealth due to their profession or other circumstance. The loser is the person who opted to stay at home and raise the children. Let’s face it, once you’re out the professional workforce for an extended period of time, it’s very hard to make-up the lost ground. I can’t say I’ve ever seen the stay at home dad who sacrificed his cricket career to be a house husband for his career orientated lawyer wife, make the black-caps after his divorce. His financial security was as strong as his marriage, the forgone sporting opportunity, nothing but a photo on the mantel piece.

That said, only an insurance actuary can put aside all emotions and quantify the potential loss that will eventuate from a divorce. Wedlockdivorceinsurance.com is now offering couples the ability to buy insurance in the event their marriage lands up in divorce. It costs about $20 a month for every $1,500 of cover. To discourage people from signing up just prior to their divorce, policyholders must have the policy for at least 4 years. The policy adds a premium of $300 per unit for every year the marriage survives beyond four. So if a policyholder buys $30,000 cover and gets divorced after 10 years, he or she would have handed over $12,000 and would receive a payout of $31,800. It’s probably not worth getting divorced for, but the payout may salvage some pride, or provide a war chest for the ensuing litigation.

Just in case you’re wondering (which is not a good sign), I don’t believe the cover is available in New Zealand… yet!