According to Life Insurance Direct Australia – which analysed more than 20 life insurance offers – while direct insurers may be quick and easy, they are not always the best value for money.
“Interestingly, what we discovered was that generally speaking, premiums on retail policies offered via financial advisers are often significantly cheaper than those offered direct to the public by big brand insurers or providers,” Life Insurance Direct chief executive Russell Cain said.
As an example, the research found that for a 50-year-old male wanting $500,000 of life insurance, the difference between purchasing a policy through an adviser and through a direct insurer could vary by up to $1,600 per year.
Mr Cain stressed that while price is one consideration when a client purchases insurance, it is important not to just settle for the cheapest option.
“While price is not the only factor when considering life insurance, it is important, so it is critical to shop around, get educated about life insurance, and speak to an expert and compare,” he said.
Life Insurance Direct has compiled the research findings into an online resource titled the Life Insurance Direct Quote Index.
The tool allows clients to enter their gender and level of insurance cover needed; it then generates a graph showing the cost of insurance policy premiums, based on entry age, for each company selected.
Well said Emkay.
The biggest cost and biggest problem with insurance without an adviser is there is no-one to counsel you to retain the cover when it gets dear (or suggest level premiums in the first place).
The number of claims we have processed for clients who at one stage or another wanted to cancel their cover is quite high and if not for the relationship and guidance and devils advocate nature of good advice, they wouldn’t have had anything when they needed it.
Advising someone to set up adequate cover when relatively young and healthy and locking in a portion of it on level premiums is one of the greatest bits of advice a planner can give.
No surprises here of course. may need to look at their lapse rates (around 50%) and their claims failures, underwrite at time of claim and then of course double the price in most instances.Where is the “journalist” from Fairfax now??
Direct insurance will create more problems for REAL advisers as we will all be lumped in together with this disaster. THIS is the biggest problem for our industry, not a few “churners”