FAIS Reality Check from a Client Perspective

In April I reached that age where the company rules determine that the time has come for me to follow Paul Simon’s advice:

“Slow down, you move too fast, you’ve got to make the morning last…”

Turning 65 was quite a mind changing event for me. The penny finally dropped that I am, after all, mortal, despite my firm conviction to the opposite, just one day before.

On the very day of my birthday, a parcel which I ordered from the USA arrived, via customs. For the privilege of having to wait nearly three months while the officials deliberated on the value of a tee- and sweat shirt, I was required to pay more in customs duties than I did, at the exorbitant exchange rate, for the items in dollars.

The shirts both conveyed the same message: “It is better to burn out, than fade away”. The fact that Neil Young wore it in the advert I saw on Facebook actually made me buy two.

“Old man take a look at my life, I’m a lot like you…”

This was also the age where I no longer qualified to be part of the employer’s group scheme. Fortunately, I could convert it to permanent life cover without the need for medicals and proof of health. The most difficult question for me to answer truthfully was always the one about my drinking habits.

Apparently, “What do you have?” is not the correct answer to the question: “Do you drink?

Inevitably, my response to the “How much” question is misinterpreted as being the weekly intake, instead of my daily consumption which I divulged.

All went well, apart from the fact that my premium increased obscenely by 475%, compared to what I paid on the company group scheme for the same amount of cover.

Getting back to my new philosophy to life – I really started taking my Vitality challenges seriously. In fact, I bought a little apparatus, cleverly disguised as a watch, which would beep if I had the audacity to sit on my backside for more than 50 minutes. In addition, it would measure all activities to ensure that I stayed busy long enough every day.

About two weeks after applying for permanent life cover, the documentation arrived. There was a little blue slip in my post box, requesting that I pick the parcel up at the counter, as it was too big for my post box. This should have alerted me already.

The big envelope contained two documents.

The thin one contained the policy schedule, comprising 19 pages.

The heavy number, consisting of 179 pages, contained the information that would help me “…understand the finer details…” of my life plan.

This information is shared, no doubt, to ensure compliance with legal obligations, but at what cost to the planet? How many trees are sacrificed every year to comply with legal requirements which really serve no practical purpose?

A few questions arose:

  1. How many clients who receive these documents will actually read it?
  2. How many of the few who do, will understand it? Correctly?
  3. How many of the conditions contained in this document may in the not too distant future turn out to be material to a claim that may arise? And if my adviser had not disclosed this to me, he could he be held responsible for any losses my beneficiaries may incur.
  4. How much of my adviser’s time would be taken up covering the details contained in the 180 (minus 1) pages? And how would this impact on his productivity?
  5. How many clients actually file the documentation, knowing that they can address any questions to their advisers. In fact, trusting their advisers to look after their interests because, in the case of a death claim, the life insured plays a very small part, other than just ensuring that he/she remains deceased.
  6. Despite being required to be all of the above, the adviser’s commission is seen as the single biggest source of miss-selling, and constantly the focus of legislative scrutiny.

All insurance and assurance contracts have over the ages been based on mutual trust. This does not appear to satisfy the legislators and regulators any more.

Perhaps hitting 65 does have more merits than I initially assumed.

Then I remembered the lyrics of another Paul Simon song:

Can you imagine us years from today
Sharing a park bench quietly
How terribly strange to be seventy.

I shudder to think what documentation will look like then.


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