Research from Life Insurance Direct Australia reveals that, on average, direct life insurance policies are significantly more expensive than retail policies.
The findings draw on the 2016 Life Insurance Direct Quote Index, which is based on research of more than 3,000 quotes from 32 brands.
The index has been enhanced from last year to include premium data for policies sourced through eight major super funds as well as the direct and retail policy markets, a statement from Life Insurance Direct said.
“The research confirms findings from 2015 that, on average, direct life insurance policies are significantly more expensive than retail policies," Life Insurance Direct chief executive Russell Cain said.
“Interestingly, the research highlights that one insurer, owned by one of the four big banks, have significantly reduced the premiums on their retail life insurance products from the 2015 data.”
The index reveals that a 45-year-old male seeking $500,000 life insurance could pay premiums ranging from $41.00 to $132.43 per month, amounting to a difference of over $1,000 annually.
Mr Cain said there are many misconceptions about which brands deliver value when it comes to life insurance, and advised consumers to do their research since life insurance premiums and policy benefits can vary dramatically between brands and distribution channels.
“We speak to people all the time who have no idea they are being overcharged on their premiums, or where to find good value,” he said.
“To avoid being overcharged on your life insurance premiums, be informed and shop around before you make a decision.”
Several firms have been impacted by the corporate regulator’s action.
Super funds must now have a retirement income strategy in place.
Vanguard has called for a complete overhaul of the advice industry.
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