Should you buy life insurance through a broker or direct?

Posted on Friday, October 19, 2018 - 11:35

Choosing the right life insurance that will adequately cover your loved ones from being financially exposed is important. With so many options on the market, it can get a bit confusing as to which policy will be the right one for you. There is also the question of whether getting your policy through a broker or directly will offer you the best option. Our helpful guide can help you weigh your options to finding the right fit for you.

Buying from a broker

Brokers are generally the ‘go to’ for people who want insight on the different life insurance policies that are available and would like to understand the relevant insurance terms that will affect their policy.

Pros

  • Take you through a full step by step application process.
  • It is done over the phone and can take 15 minutes to an hour to complete.
  • You get to choose the amount best suited to your needs with a premium that is affordable to you.
  • Give you better access to an extensive range of insurer products by shopping around for you to get the best rate on your policy.
  • Detailed underwriting process that ensures that you take out a policy that will adequately cover you.

Cons

Life insurance brokers vary in terms of their service and some could represent a single company whose main objective is to make sales of the products that they offer. Chose a broker that has the experience and access to a wide range of lenders to get the best deal for you.

Buying direct

If you are someone who already knows what they want from a life insurance product, then buying your life insurance directly can be an option for you. Applying through this process can be quicker as the application process can be completed over the phone, online or directly. Some of the other benefits are:

  • Minimum medical information is required from you during the application process.
  • Allows you to get a policy from an insurance company that you know.
  • A convenient application process that can be beneficial for people who do not have an extensive medical history.

Cons

The limitation of applying directly for life insurance is that you may have to review and compare them yourself. You could be forking out more on premiums because of the limited underwriting that comes with this option. Other limitations are:

  • Can limit the maximum cover amount you can purchase.
  • You may have to manage the claim process on your own or through family members.
  • You may not receive any financial advice or guidance when it comes to getting a policy that will adequately cover you.
  • Claiming could cost you more if you skip reading the fine print.
  • There are other options such as getting your life insurance as a group through a superannuation fund, but this has its limitations too. Although it may be an affordable option for many Australians, it can limit you in terms of what it can and cannot cover you for. Always remember to compare your options.
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