Comparison websites provide the convenience of being able to compare different products online, and many of us would assume what we get is the same as buying a bespoke service. When it comes to life insurance we’d be wrong.
Research by Rice Warner has found the commissions that insurers pay to life insurance websites is the same as that paid to qualified financial advisers who spend time assessing the consumer’s needs to come up with a tailored offer of cover.
The actuarial firm questions the focus on price to differentiate products.
It says this means consumers may overlook what is being offered for the price and may not get the best cover for their situation.
A financial adviser will take the client through an assessment aimed at matching the best cover to their particular needs. There is likely to be a discussion about trade-off between cover and price that considers mortgage repayments, age of children and how long the consumer is likely to need what level of cover.
The adviser will also step in to help at claim time, but Rice Warners notes comparison websites give no information on how consumers will be helped if they need to make a claim.
“This is a clear disadvantage compared with using a financial adviser who is expected to help their clients through the full cycle of the life insurance policy,” says Rice Warner when launching its Life Insurance Aggregator Review 2017.