Barefoot finally gets into crypto

“You got balls”, said my editor, shaking their head.

I’d just told them about a conversation I’d had with Australia’s biggest life insurer, TAL.

Last week I answered a question from Bill and Wendy. Bill is 88, on life support, dying. Wendy is 79. They’re on the aged pension, renting, and handing over $304 a fortnight for a funeral insurance policy they took out in 2010.

Let me explain funeral insurance:

It’s the ‘Ab-Zapper 3000’ of the finance industry.

“Simply clamp these jumper cables to your muffin top and taser yourself into a six-pack! All for four easy payments … but wait, there’s more!”

Financial advisors wouldn’t give it a second look for their clients. So, instead, insurance companies go direct to Aussie lounge rooms, flogging it in ads to lure unsuspecting oldies watching Larry Emdur interview a psychic dog.

The people who buy it are battlers … kind-hearted, loving ones. They don’t own a house. They don’t have super to cover funeral costs. They sign up because they don’t want to burden their kids.

That’s their motivation. 

Yet the BMW-driving finance bro who dreamed this up? 

His motivation was earning a big, fat bonus.

Here’s the design: premiums start low. Then they ‘step up’ every year as you get sicker and broker. In other words, customers pay the most when they can afford the least.

And here’s the trap: cancel at any point – even after years of paying – and you lose everything.

My view?

Funeral insurance was created by rich people to exploit poor people.

Well, this week I officially became Bill and Wendy’s financial counsellor.

And I fight for my clients. 

Hard.

And that’s how I ended up in a ‘ballsy’ conversation with a TAL representative this week.

“Scott, you’ve already made up your mind. You’re saying our product is predatory and unconscionable”, argued the TAL representative.

“Bloody oath”, I said.

When Bill and Wendy signed up in 2010, it cost $41 a fortnight. In March, it rises to $304.

They’ve already paid in almost as much as the funeral payout.

If Wendy cancels now, she gets nothing back. So she keeps paying.

Which means she has a choice:

She can turn on the air-con for her dying husband.

Or she can keep the insurance.

Not both.

That ain’t bad luck ... that’s exactly the way the product was designed.

“And that is the trap your company built”, I said to the TAL rep.

“Well, you’re hardly independent”, she fired back.

“Look, I’m the only one who’s truly independent here: you’re banking their cash, Wendy and Bill are paying it … I’m doing this for free.”

“So what do you want?” the TAL rep snapped.

“I want all their premiums repaid”, I said calmly.

“All of them?” she scoffed.

“With interest.”

Tread Your Own Path!

P.S. A statement From TAL: 

“We are deeply saddened to hear of Wendy and Bill’s situation and do not want to add to their worry at what must be an incredibly difficult time. We have worked with Wendy and Bill and agreed an outcome that we hope provides them with the support they need.”

(And I can confirm that Wendy and Bill are delighted with the offer they were given.) 

TAL also stated: “We ceased selling stepped premium funeral insurance products in 2013.”

Nice.

Yet what they didn’t state was they’re still collecting the air-conditioning money from all the Wendys and Bills who signed up years ago. If you’re stuck in one of these policies, speak to a financial counsellor at the National Debt Helpline on 1800 007 007.