Is your life adequately covered?

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Welcome folks. It’s YourLifeChoices’ podcast Mind Your Own Retirement with me John Deeks and the founder of YourLifeChoices Kaye Fallick. And today we chat with Anthony Brown, CEO of Noble Oak Insurance, which is a preferred partner of YourLifeChoices.

Kaye Fallick: Noble Oak has delivered life insurance for more than 145 years.

John Deeks: I remember when they started.

KF: I bet you do! I don’t, but I think it’s really interesting because most of us have more faith in the long term. So, over to Anthony to find out about the start of Noble Oak.

JD: Welcome to you, Anthony, what is the history?

Anthony Brown: Thanks, John. Thanks Kaye. Look, I’m glad you remember it from 145 years ago, John, because I feel like I’ve been here for 145 years.

JD: I bet.

AB: Noble Oak is actually one of Australia’s oldest insurers. And it started as the United Ancient Order of the Druids. Some people may have heard of. In 1877, the Druids were very popular in the UK. In fact, Winston Churchill was a member of the Druids in the UK. And the Englishman brought the Druids concept over to New South Wales. So the Druids were a benevolent group that looked after their members and in fact used to put money into a box and if one of the members got sick they’ll provide the money to the family of that member. So it started from this lovely background of benevolence and looking after other people. So as it matured and eventually turned into Noble Oak, we’ve really tried to keep those old principles the Druids.

JD: Over the 145 odd years that you’ve been in existence. How has life insurance changed?

AB: That’s a good question. I mean, it’s become professionalised and regulated over that period. So 145 years ago, it was obviously not sophisticated, people would literally provide money – pull money and provide it to others when they needed it. Over the 145 years, banks have obviously formed and become regulated; APRA and ASIC and other regulatory bodies have formed. So while the need and the service is still there, it’s just become much more regulated and much more professional. So we’re now an APRA-regulated insurer. We have to follow a lot of rules, obviously, which are legitimate. We have to hold a certain amount of capital. We have to have certain board structures and so on to meet all these regulations.

KF: So Anthony, to cut to the chase for YourLifeChoices members, you’ve got a frightening statistic that 42 per cent of Australians don’t have enough life cover. Why do you think that’s the case?

JD: And what is enough?

AB: We’ve obviously had bush fires a few months ago here which were some of the worst recorded, but the largest number of deaths from bush fires recorded in Australia’s history was from the Black Saturday fires in 2009. There were 173 deaths, but only $1 million was paid out in life insurance because people were not covered. So, you’re right, Kaye. A lot of people do not have the cover they need. They might have home and car cover. In the case of the Black Saturday bush fires, their homes may have been rebuilt, but if the income earner had passed away, they could not afford the repayments on the home loan. So they would lose the home anyway.

KF: So, do we put ourselves last?

AB: We do. We do put ourselves last often. There are a few reasons why people are generally under-insured. It is a grudge purchase. It’s like doing your tax return. You don’t want to do it and some people leave it too long unfortunately. They need a trigger to make them take out the cover. There is a lack of trust in the industry as well.

You know, during the royal commission, a lot of insurers were held up in front of the commission and exposed. So people’s trust has diminished, but 94 per cent of insurance plans are actually paid, which is recent data from APRA in 2019. And people do perceive it as expensive, even though they’re often pleasantly surprised when you can get cover for as little as $20 a month. For older Australians it’s probably around the $40 per month for a reasonable amount of life insurance cover.

JD: Anthony, when I had the children all at school and was working and beavering away, my life insurance was always a firewall that if something happened to me, the kids could continue to be educated, the home loan could still be repaid, etcetera. Now I’m not in that situation. Why do I need life insurance?

AB: It’s a good question because we’re finding a lot of people who are older, or in a situation where their kids have left home, they are still requiring life insurance. And it’s really all about dependency. Do they still have dependants? And debt. Do they still have debt? So, people are holding debt for longer than they used to 20 or so years ago – the home loans are going for longer periods. Obviously, they’re larger and they’re harder to pay off. And dependants are generally with us longer, either living in the home longer or require our support for longer.

KF: Well, often they come back too.

JD: Oh boy do they? They’re boomerang kids. Boomerang kids.

KF: So I think the message underneath this is you’re suggesting that people might wish to review their situation because a lot of us do have that volatility around what’s going on.

AB: Absolutely. Many years ago, you would take out life insurance while you had kids and debt, and as you paid your debt off and your kids left, your life insurance would wind down. But as you said, kids are coming back, becoming dependent for longer, obviously with COVID-19 that’s even a greater issue at the moment and people are holding debt for much longer. So the need is absolutely there.

KF: So to find out more, my understanding is, if people look at the Noble Oak links on YourLifeChoices website, you are putting up some special offers and incentives.

AB: Absolutely. We are providing a special discount for members. And we have a lot of information on our website about the different covers you can get, what you might need, how to work out how much you need. We also have a calculator to help you determine your needs.

JD: I like a calculator because you can quantify where you’re at.

AB: Exactly. There’s a lot of calculators around that would only take a few seconds and come up with a quick number. But we’ve actually got quite a comprehensive one that goes through your real needs and comes out with a few suggestions, so you can pick the best solution for yourself.

JD: Thank you so much, indeed, for giving up your time, Anthony. I know this is a very busy time for you and it’s not an enviable task with so much going on around the world right now, but we certainly do thank you and all the team at nobleoak.com.au for your help.

AB: Pleasure. Thank you, John. Thank you, Kaye.

JD: YourLifeChoices subscribers have until 28 August to take up Noble Oak’s current life insurance special offer. It’s a simple step to take to protect yourself and your loved ones, should the unforeseen happen. Get a quote online today at https://www.nobleoak.com.au/yourlifechoices/ to secure your first month’s cover free. Plus you could save 22 per cent on average when you switch your life insurance with Noble Oak’s premium life direct cover. Alternatively, you can also speak to a Noble Oak team member and have your questions answered on 1-300-041-494. Terms and conditions apply. Consider the PDS AFSL247302.

Noble Oak is a preferred partner of YourLifeChoices

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