Life Companies V Brokers
Life insurance is provided by life insurance companies, many of which are household names, including Standard Life, Norwich Union, Royal & Sun Alliance, Allied Dunbar and Friends Provident.
Life insurance brokers act on behalf of one or more life insurance companies. Once a customer has requested life insurance cover from a broker, they obtain quotes from each of the Life companies according to the details provided then offer the best quote back to the customer.
As with car insurance, each insurance company offers lower premiums to different demographic groups. It therefore pays to contact each of the Life companies, or contact a broker who will do the ‘leg work’ for you, to ensure you are paying the lowest premiums possible.
You may think that obtaining life cover through a broker is more expensive, due to commission payments to the broker. This is not the case. The cost of going via a broker is the same as going direct, and as you will see below, can be cheaper.
Life companies pay commission to brokers for each life insurance policy secured, which gives the broker an incentive to sell the Life company’s insurance. This gives the insurance company a network of brokers and therefore access to a far greater number of potential customers.
If you go direct, the Life company will not reduce your premiums by the value of the commission normally paid to their brokers.
As mentioned above, it is possible to actually save money by going via a broker. Some brokers pass a percentage of their commission back to their customers, reducing premiums throughout the term of the policy. These brokers are known as ‘Discount Brokers’.
When you purchase life insurance cover via a discount broker you receive exactly the same cover as if you went direct or via a ‘regular’ broker. The only difference is that some discount brokers do not offer financial advice, instead they simply provide you with the cover you request.
We have partnered with a leading discount broker ‘Direct Life and Pension Services’ who will be able to provide you with a substantially discounted life insurance quote. Click here to get an instant quote online.