What is discount life insurance?
As with any product in today’s economic climate, even life insurance, discounts can be had if you know where to find them. The life insurance market, as for any sector of the financial products market today, is an extremely competitive one.
You may think the best way to find discount life insurance is to deal with the company and ‘cut out the middle man.’ However, financial products are quite unique in that whereas most industries see a ‘middle man’, be he a retailer or agent, adding his fee to the cost of the product, in finance employing such a ‘middle man’ can often work out cheaper. This is because product providers are kept in business by such these middle men, referred to as brokers in the insurance trade. They introduce or recommend a certain life insurance to their client, saving the insurance company admin and marketing costs, and as such are financially rewarded themselves. Simply because you go straight to the company for a quote, this doesn’t mean the saving of paying the middle man will be passed on to you!
This is because the broker bears the brunt of the work, by completing your application forms. Also, if you are dealing direct, you have probably responded to an advertisement or web link, which the insurance company will have had to pay for.
As a result, obtaining the best price on discounted life insurance may be a case of dealing through a broker. Be aware that not all insurers pay the same fee to brokers. You might think that this is to entice brokers into offering their products over others, but this is not always the case. The broker should be paid for his time spent on the admin associated with obtaining your life insurance, and for bringing a new customer to the insurance company. The broker has every right to all of this fee, but many now share the commission on a product with the customer, enabling them to obtain their life insurance even cheaper. This is true discounted life insurance, as you are getting the product for less than its actual price. Also worth noting is that the best prices are often quoted by companies just beginning to assert their presence in the life insurance market, as they will be looking to start out with a strong market share. A word of warning though: make sure that the nature of the insurance is the same as the current market leaders, and that costs have not been reduced by reducing your level of cover.
Disclaimer: The information contained on this page is not intended, nor should it be construed as providing any form of financial advice or guidance as to which insurance product/policy is right for you. If you are unsure as to which product meets your requirements/needs you should always seek advice from an Insurance Professional.