It almost sounds too simple to be true, but one of the easiest ways to reduce the cost of your life insurance is to source premiums with a commission free insurance broker.
Although this may seem strikingly obvious, a large majority of the population fail to take advantage of this strategy, unaware of its money-saving potential.
Depending on your age, medical history and occupation, online life insurance quotes can vary considerably. You and your neighbour may pay entirely different premiums, but one thing you can be almost certain of is that you’re both forking out a hefty commission fee on top. Yes, even the policy you thought you bought for a good price on that comparison site.
Why compromise?
Commission is the force that drives insurance companies to push their products, but this doesn’t always mean that you’re getting the best deal. The inflated price of the policy often forces people to compromise on the quality of their life insurance in order to afford the premiums. Going with a commission free broker, however, means that all of your hard-earned cash will get you the highest quality product possible.
An example
To put this in perspective, here’s an example. Emma is a 35 year-old non-smoker who’s after individual, level term cover of £100,000 for 25 years.
If this policy was bought directly from the cheapest insurer charging commission, a guaranteed £100,000 pay out would cost*:
| Per month: | £7.10 |
| Per annum: | £85.20 |
| Life of term: | £2130 |
If the same was purchased with a commission free broker it would cost:
| Per month: | £5.60 (£1.50 saved) |
| Per annum: | £67.20 (£18 saved) |
| Life of term: | £1680 (£450 saved) |
*The example provided is based on a real life insurance quote from a leading product provider.
Substantial savings to be made
As you can see from above, considerable savings on life insurance can be made with the careful selection of policy-type. Admittedly, when viewed on a monthly basis, Emma’s £1.50 doesn’t seem like that much. However, when you consider the £450 this amounts to over the full term, the money-saving potential of opting for commission free is significant.
The ambiguity of commission rates has attracted a lot more attention in recent years. A YouGov survey reported that many consumers massively underestimate the percentage of commission they are being charged. This is an added expense which doesn’t necessarily benefit you, and it can be easily avoided.
How do I find commission free brokers?
Finding commission free brokers who provide affordable life insurance is easy. Next time you go to compare life insurance quotes, instead why not search for ‘commission free life insurance’? You’ll thank yourself later, it really is one of the easiest and simplest ways to save money and lower your insurance premiums. This money can then be put towards something to enjoy with your loved ones in the here and now, and as you’ve seen, it can really make a difference.
