Can Tech-Based Life Insurance Products Compete with the Hands-On Service of an Advisor?

As a life insurance advisor, when the time to keep my promise arises, it’s a huge release for me because I can keep my word of showing up with the cheque when the worst happens. But what also comes with that is an emotional loss, as my clients are also my friends and this relationship becomes a big part of each other’s lives. 

“Basheer told us, ‘If anything happens just call Rickson’.” 

These were the words that Basheer’s family constantly told me while I was at his funeral. To refresh your memory, Basheer is the client I wrote about in this article, who unfortunately has passed away. 

The last few weeks have been occupied by the claims settlement process for Basheer’s family and educating them on how to best manage the money left behind. In the meanwhile, I also get asked often by other high-level executives to vet quotes from life insurance websites that offer policies online. 

This brings me to the question, will purchasing a life insurance policy online be able to deliver the same attention to detail, bespoke solutions, and post claims service to your dependents that working with an advisor would? 

Let me explain with an example. 

Relationships That Bleed Into Families 

Basheer’s son, Fadil, is currently 19 years old and had seen me a couple of times prior to the day of the funeral. We’ve had at-home family barbeques and I’d even been to Basheer’s 50th birthday party when Fadil was about 16 or 17 years old and his dad was slipping him some alcohol on the side. Safe to say, that his family know who I am.  

To my surprise, in the middle of the funeral, Fadil came up to me, gave me a hug, and said, “thank you so much for being there, my dad always said to me if anything ever happens to me, call Rickson. That’s all you have to do, call Rickson.” 

Very emotional for me. But my reason for mentioning this? This ties in with the fact that there is a whole other level of ease and comfort for your dependents when they know someone has their back. 

“I Saw a Quote Online” 

While I was at the funeral, I noticed a few familiar faces, people that Basheer had introduced me to over the last 13-14 years I’d been his advisor. One of them, let’s call him Zain for anonymity, came up to me, and here’s how our conversation went: 

Zain: “Listen, man, this whole thing has happened over here, I see how short our life can be. I’d like to get my life insurance sorted out; can I please call you?”  

And while Basheer’s body was being buried, Zain was taking my number down and said he would give me a call. Two days later, I receive a call from Zain that went something like this: 

Zain: “Listen, I don’t have the time to look into the details, but I saw a quote online for life cover worth AED 1,750,000 with premiums of AED 21,000.” 

I said, “Wow. How did you arrive at that number?” 

He said, “I don’t know, because that’s what it allowed me to input.” I asked him if everything was okay with him and he said he was a smoker and a diabetic at 55 years old.  

So, I said, “did the system ask you all these questions?”, and he said, “Yes, sort of, and they just gave me this big ball of number.”  

Purchasing Insurance Through an Advisor That Has Your Back 

As an advisor, this is how I see life insurance. An application form gets filled up. You discuss with the client all their health and lifestyle-related issues; you talk to them about their life insurance requirements. Why they need life insurance cover worth AED 1.7 million? How did they arrive at that number? If their family received AED 1.7 million tomorrow, is that money sufficient enough to replace their income?  

I ended up doing the math with Zain and he actually needed a life cover of about $950,000. But his first instinct was to buy something online just because he was in a hurry.  

It brings me back to this idea of a trusted life insurance advisor and I’m going to take you through a journey. When I first met Basheer, we spoke about his life insurance, his investments portfolio, and his property purchase. He acknowledged that he purchased it at a very high point in the market and the markets crashed, he lost a lot of money on it.  

Over the last 13 or 14 years, we met a couple of times a year, through me being with one insurance brokerage as a partner and then leaving and joining another firm as an advisor, Basheer and I stayed in touch and he remained my client when I moved him around and managed his money. When he had shortages in money along the way, he spoke to me about it and we got some of his portfolios encashed. When he needed some re-balancing, I was around. When he needed to discuss things related to his kids, his marriage, his family, his assets, his requirements for the future, and the fears he had, he spoke to me. He messaged me at 3:00 or 4:00 am through COVID, frustrated and psyched about things. When he had job pressures and felt inadequate over there, he’d tell me about it. Basically, the relationship evolved into something which was maybe even more than what I have with some of my friends today.  

Now that he’s passed on, my job is on this side of the claim. My job is to educate his family, who’re not used to dealing with money, not even used to paying the DEWA bill. To educate them on how to use the estate he left behind. To pool all my resources from all the other financial advisors I know in the jurisdiction that they are domiciled out of. They’re British Pakistanis, so there are also potential taxes on their estate in the UK. So, my job is to ensure that the family in Dubai, the family in the UK, are dealing with the right advisors. If they don’t have them, then I’m drawing those connections up for them. We’re having group calls and meetings to ensure that what the advisor in the UK knows and what I know is being matched together so that we get the right output for Basheer’s wife, Amira.  

Evaluating Tech-Based Solutions for Life Insurance 

And I know that purchasing a cheap policy online is not going to deliver you the same results when it comes time for the settlement of a claim. To put it in perspective, Basheer had a life insurance policy with me and he had a life insurance policy with another adviser as well, which I didn’t know about. But because I had already gone through the entire process of submitting the first claim, I managed the claim settlement for the second policy as well. 

I’m sure in time the tech will be such that these systems will evolve and develop so much more. But at this point in time, is there that kind of tech that exists that can replace completely the handholding process that comes from a relationship where you can be there 100% for your client?  

 I’m not negative about technology, I do believe tech is great. I do understand and appreciate the fact that the next generation is more interested in purchasing through aggregator websites, which I totally understand the point behind. I mean there is no free lunch, right? You get what you pay for. So, if you pay for a cheaper contract online without the guidance of an advisor when you’re purchasing it, surely you can’t expect the guidance of a consultant when it comes time to settle claims.  

I mean, if you think about the complexities that are around the claim settlement as a consultant, we deal with insurance companies on a daily basis. We might even have personal relationships with people within the insurance company simply because of the history and the number of cases we’ve worked on with them. Given the number of claims that have been settled and the number of interactions that are done on a weekly basis, there’s a relationship manager for the insurance company that deals with us. There is an underwriter that we speak to, one on one, when it comes to larger cases. There’s the entire service team that is in touch with us on a regular basis.  

Assume that your dependents may or may not know much about the policies you’ve taken out and the plans you put in place. From a service proposition standpoint, if things had to go wrong now, would you rather have them running around trying to figure out who is the right person to speak to? With these looming questions on their mind:  

• How do we get this claim settled?  
• How do we create liquidity?  

• How do we manage the day-to-day finances of the household? 
• How do we manage property taxes in other jurisdictions? 

Or would you rather have an advisor show up and take care of the problem? I mean, that’s what you paid for with the advisor. You paid for advice, you paid for hands-on attention.  

Are You the Mercedes? 

It’s almost the same as when you bought an expensive car (you are the expensive car in this situation) and something is wrong with the car. Something is wrong with you. For a car that costs you a couple of 100,000 dirhams, with high maintenance costs, complex mechanics, and electronic computer chips, do you not go to the Mercedes showroom to deal with your Mercedes car?  Or would you Google or YouTube it, to try and figure out the process of sorting out your car? You would have to buy the parts on your own online and hope that it’s the right one that comes up – only to receive that upgraded part, which is no longer compatible with your car. 

Or would you rather have a mechanic tell you, ‘Hey, this is what’s wrong. We ran a system check on this, and here’s what you need to do to get it fixed it. Don’t worry about it. We’ll take care of it.’ What would you rather have your dependents do when things go wrong?  

 I’m fully conscious of the fact that the world is moving towards tech-based solutions and I’m even for it, in many cases I buy my own motor insurance policy online. I buy my travel policy online. I manage my claims and everything else for my own medical insurance policy online, so I totally get that. But when it comes to a high-value proposition, when it comes to a $1,000,000 death claim, a $3 million death claim, a $50 million death claim, you’ve got to ask yourself this question:  

"Would you purchase your property which is worth a couple of million dirhams, without going to see it? "

Would you buy it online through websites? Are you concerned at all about a bait and switch? Are you concerned about the fact that the picture may not really be what the property looks like and there’s a huge hole in the ceiling in the kitchen? 

And if you are, then shouldn’t you apply the same science towards buying a life insurance policy worth $1,000,000 or more. If you are happy to purchase this contract online, there’s nothing wrong with it. But be prepared then to manage the entire claim settlement process yourself. Don’t expect the hands-on service of a consultant because that may be asking for too much.  

I agree that all advisors may not think the same as me when it comes to this, but what is my motivating factor with clients right now, is my moral obligation to them. Making sure their claims are settled and their family is well educated on how to financially continue life as before is one of my biggest wins in this field of work. 

Disclaimer: The above facts, figures, and client information have been slightly modified to protect the client’s identity.