Discounted Life Assurance Policies - Company Quotes Online

Here’s an interesting fact about the business of discounted life assurance policies. In many other businesses the middleman just adds costs to the company quote and takes money away from it, sometimes without contributing that much. Football agents spring to the forefront of the mind here. But in personal finance it is often cheaper for you to use a middle man, or in this case to go to an assurance broker.

The reason for this is that product providers are helped by brokers, who introduce customers to them, saving them marketing and administration costs, and this is why the product providers pay commission to the brokers. If you go straight to the product provider then they don’t need to pay commission to anyone. But don’t think that means the commission goes to you.

Instead they have to do more administration as that cost isn’t born by a broker. It is also likely that you found the provider by reading an ad that they paid for, or going to the website that they set up. Furthermore, the life assurance policy provider will wish to be making a profit so that will also increase the premium amount. They do run a business you know! So don’t think that you benefit from cutting the middle man out.

Now, the commission paid to a broker on a life assurance product can be quite large. In an ideal world every policy provider will pay the same commission to each broker, but this isn’t an ideal world so brokers are offered different commissions for different products. Some people say that this is to provide an incentive to the broker to introduce the customer to them, regardless of what the product is. But this is too simplistic and populist a view. The broker needs to be recompensed for their administration costs and also rewarded for introducing a customer. The broker is within their rights to keep all of this commission, but instead what many are doing is “sharing” the commission on the product with the customer by offering it to them cheaper than others. This is what a discount life assurance policy is.

So, your premiums are lower than if you were to buy your assurance product through the provider and the level of cover than you get on the policy is the same as if your policy was bought direct from a policy provider then the only thing that is different is the price, and so it is discount life assurance. The best place to look for these products are with new entrants to the assurance market, who are trying to achieve market share. Just make sure that the cover is the same, because being underinsured is not worth it.

 

 

 

 

 

 

 

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