Many people are tempted to buy their Life Insurance online nowadays. This blog was set up to give you some more information before you decide whether to simply purchase online, or whether to speak to a qualified broker about your needs.
Cheapest Premium
Many people that go on to these comparison sites do so to get the cheapest premium possible, which is understandable given today's current climate. What most people do not realise however, is that most of these comparison sites sell their details on to thousands of brokers bidding for a 'lead'. Brokers are buying these leads for anything from £40 per lead to £000's for batches. This leads to the problem of pressurised selling!! If a broker has paid £000's for a batch of leads you can rest assured that he will be doing all he can to get the sale! This will most probably lead to bad advice - just to get the sale!
Direct Purchase & Non-Disclosure
With some comparison sites you can go straight through and purchase the Life Insurance directly. These products are generally stripped to the bone to get the cheapest price possible. They will exclude things like waiver of premium and terminal illness cover, both of which literally cost pence to add.
The other main problem here is non-disclosure! You decide that although you smoke you'll tick the box to say you are a non-smoker because the premiums are cheaper. Unfortunately you die 10 years later from throat cancer, what will you get back? You will get back the premiums you paid if your lucky - but the sum insured certainly wont be paid!
Ease of Use
Other people will try comparison sites as they think it is easier than contacting a broker directly. Lets look at the scenario:
1.You go onto a comparison site and register with them
2.You enter your details to get a quote (not reading the small print)
3.You are then told an adviser will contact you within the hour
- 1-3 will probably take ten minutes
4.For the next hour or two, sometimes even days, you are hounded by various brokers who have all received your details and who are all trying to recoup the cost of this 'lead'.
5.You decide to go with one broker who you fell is offering the best deal.
6.The broker reconfirms all the original details and will then go through the application form for the chosen provider, with all relevant information arriving in the post.
- 4-6 could take anything from a couple of hours to a couple of days.
Lets look at the other scenario:
1.You phone a fully qualified IFA who has access to all the products on the market, are given advice on the correct product, quote received, application filled in, documents sent out in the post.
Depending on your circumstances this can be done within 30mins, without leaving your home.
Advice
The second scenario mentions one very important word that the first one did not - ADVICE! Life insurance is a very complex product and there are many different products out there. Speaking to an advisor will at least give you the different options available, whether or not you decide to choose them is up to you.
Lets look at an example of this:
A young married couple John & Sarah purchase joint life insurance online for £150,000 to cover their mortgage. They have 2 children aged 2 and 5. John is in a car accident a few months later and dies. Sarah receives the £150,000 and clears the mortgage. Sarah however still has all the bills to pay, 2 children to raise and work full time - now unless she is one of these top bankers getting hundreds of thousands of pounds a year, she is going to struggle. If they had spoken to an adviser they would have been made aware that they should probably have some 'family protection' on top of the 'mortgage protection'. Would they have taken it? Maybe, maybe not - but at least they would have been given the choice.
Let me leave you with one more quick thought.... If you have purchased single life insurance through the internet is it in TRUST? or will any family you have need to wait for up to 12months to this through probate?
Hopefully you have found this article useful.
If anyone would like to discuss this in more detail or would like advice, a quote or just some general information please email your contact details to
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