Where do I go to buy life insurance?
Its a question we all have to ask someday.
This question is usually followed by – Which comparison website should I use? What does an insurance broker do? Maybe I should just ring one of those numbers I’ve seen on the TV adverts?
Well, you can purchase Life Insurance through all of those avenues – but which is best?
In this article I’m going to be looking at your different options, and what the pros and cons are of each.
Lets answer “Where to buy life insurance?” once and for all!
I think we’re all in agreement that having some sort of Life Insurance policy is a must, particularly if you have children who are financially dependent on you, and a mortgage, but it can be a little bit confusing when it comes to where you should buy Life Insurance policy from.
Insurance is a crowded marketplace, so you won’t have a problem finding a company that wants your business – but before you ring that number from the advert that you’ve always got stuck in your head, or start an opinion poll on Facebook, let’s have a little look at your options.
Should I Find Life Insurance Through Price Comparison Sites?
We’ve all heard of price comparison companies such as Compare The Market, and probably even used them for something such as your car insurance (and to get a cuddly Meerkat for the kids to argue over, meaning you end up going back to them for your home insurance).
But what are the pros and cons of using such a service for something more complex, such as Life Insurance?
The Advantages Of Using Price Comparison Sites To Buy Your Life Insurance
1. It can save you money
I mean, that’s meant to be the point isn’t it, so it’s no wonder that for a lot of people wanting to purchase any type of insurance these sites are their first port of call.
You enter your details and you’ll get a list of companies that can help, telling you what they do and how much it’s going to cost. Then you compare each one and can, in theory, find the best deal.
2. It’s convenient
There’s no need to sit searching through individual companies’ websites or ringing them all for quotes – the information is right there. Simples. (Sorry).
3. There’s lots of choice
There are loads of price comparison sites out there to choose from, not all fronted by Russian meerkats, and while a lot will have the same companies on them, there will be some that list companies that are unique to just their site.
This means that even if you end up searching 2 or 3 comparison sites, it’s still more efficient than searching each company individually.
The Disadvantages Of Using Price Comparison Sites To Buy Your Life Insurance
1. You’re On Your Own
You choose the insurance company, you complete the application, you set it up and you have to make the claim.
This means that if you choose an insurance company that won’t cover certain conditions or you get something wrong when setting up the application, the fault rest entirely on YOU and you cannot claim through FSC. (Financial compensation scheme)
2. Not All Sellers Are Listed
Perhaps they are only listed on one or two price comparison sites, and not one of the ones you have chosen to look at…or maybe they just don’t want to be on any of them!
Direct Line are a famous example of such a company – in fact their whole marketing schtick is that you won’t find them on price comparison sites.
Basically with these sites you aren’t really getting a full view of the market, and you could be missing out on a better deal elsewhere.
3. There’s No Personal Touch
Although for some people, having zero personal contact is seen as a big plus, when it comes to insurance it really is beneficial to have a point of contact in case you have any queries or want to know that the product is going to deliver exactly what you want it to.
With price comparison sites you are literally left to pick from a list, with no additional information or advice.
You could end up paying for something that isn’t going to fulfill your family’s needs if you were to pass away.
Should I Contact An Insurance Company Direct For My Life Insurance?
You’ve seen the adverts; a man comes in from work, ruffles his child’s hair and kisses his smiling wife, before sitting down at the kitchen table to sort out his Life Insurance – normally on the advice of a workmate, smugly telling the woman on the phone that he’s 32 and never smoked…
Despite the blatant lies depicted in this scenario (there’s always about 4 kids running amok in those ads – trust me, the wife wouldn’t be smiling), this is an option for you when it comes to purchasing Life Insurance. But is it a good one?…
The Advantages To Contacting An Insurance Company Direct For Your Life Insurance
1. It’s Faster
You’ve decided this is the company for you and you know what you want.
Plus if you don’t want to talk to somebody over the phone you can quite often apply online.
2. You Can Ask Questions
Speaking to someone who works there means that if you have any questions about how to buy Life Insurance they can answer them – so at least you’ll know for sure what you’re covered for and what you’re not.
The Disadvantages To Contacting An Insurance Company Direct For Your Life Insurance
1. You Are Talking To A Non-Advised Broker
Hard to believe though it might be, that smiley blonde from the advert who answered your call straight away and is inexplicably in a white room all by herself, is not just a terrible actress, she’s also a non-advised broker.
These are the unqualified people who sit in call centres with a script and who you would tell to get a ‘proper job’ and hang up on if they cold-called you.
Sometimes they do actually work for the Insurance company in question, but either way, even though they can of course answer questions about the policies they sell, they can’t give any advice, or let you know what they think is best.
Essentially you’re left to your own devices, the same as a price comparison site.
2. It’s More Expensive
Believe it or not, going direct to an insurance company can often be more expensive than using a comparison site or broker.
The reason being that when you use a comparison site or a broker, the insurers know you’re comparing prices, meaning they HAVE to offer the best price to be top of the list.
On the flip side, if you go direct to an insurance company, they are competing with no one.
3. They’re Biased
The simple fact is, you’re speaking to someone who literally gets paid by the insurance company you’re calling, meaning they couldn’t possibly give you an unbiased or fair insight into their company.
In other words they’re not going to tell you if there’s a better deal elsewhere.
So I think we can agree that although price comparison sites have their place, it is nice to speak to someone who can answer any questions you might have.
Now, if only you could do that and get some sound advice from someone who is qualified to give it…
Well, as luck would have it….
Going To An Advised Broker/Financial Advisor For Your Life Insurance
Personally, I think these are your best bet.
Always incredibly charming and devastatingly attractive, these perfect specimens of…ok, ok…I’ll do cons first this time:
The Disadvantages To Going To An Advised Broker Or Financial Advisor For Your Life Insurance
To be honest, there’s only really one, and it doesn’t always apply:
1. There Might Be Fees
SOME advisors do charge a fee for their advice (we DON’T by the way, in case you were wondering).
But to be honest, paying a professional for their advice is still going to be cheaper in the long run than paying out for a policy that doesn’t suit your needs.
The Advantages To Going To An Advised Broker Or Financial Advisor For Your Life Insurance
1. You’ll Get Professional Advice
An advised broker is working for you and so you can either advise you face to face or over the phone.
They won’t just be able to give you the factual information on individual policies, they will also be able to give you advice on what they think or know is best, without being affiliated to any particular company.
This means they can find the best deal to suit your needs, with no ulterior motives.
2. You Are Protected
Using a financial advisor is a little bit like having a little financial superhero on your side (but with less lycra), in that you will be protected under the Financial Compensation Scheme.
This means that if you were to buy a Life Insurance policy on the advice of your broker and it doesn’t pay out because they gave you bad advice, you would be financially 100% compensated.
And there you have it – all the pros and cons of the different avenues you can take to buy your Life Insurance.
By all means listen to friends, ring the numbers you see on the ads, and have a look through the price comparison sites.
I would however always advise that you seek some professional advice before you purchase a plan – for something as individual as buying Life Insurance that is to protect your family should the worst happen, it’s good to know all the options available to you.
I hope my article has answered the burning question of “Where to buy life insurance?”.
If you would like a Life Insurance quote, or if you have any insurance related questions please do get in touch.
Our advice is without obligation, and one of our qualified advisors would be more than happy to help.