Reviewing your life insurance never makes the top of anyone’s to do pile – it simply isn’t all that fun. However, life insurance has never been easier to buy than it is in today’s market. So if you’re in the market for a new policy, here are the three main ways you can buy life insurance: Buy life insurance online.
Directly (direct life insurance)
Through an adviser (advised life insurance)
Through your superannuation
Direct life insurance
Direct life insurance is the ‘DIY’ life insurance option – it generally involves buying life insurance directly from an insurer or one of their affiliates. Direct life insurance can be obtained either online, over the phone or directly from a provider’s branch, and is possibly the simplest way to buy life insurance.
One exception to this in the current market is NobleOak, which offers fully underwritten, tailored life insurance directly to consumers without the use of a direct reseller or financial advisor. NobleOak states that its method results in premiums that are, on average, 20% lower than other major insurers when purchased through an advisor or directly through that insurer.
Level term life insurance comparison
Direct Life Insurance appeals to people who know what they want and like the idea of having a straightforward life insurance policy in place to protect their family and assets, should the worst happen.
If you’re looking for a direct life insurance policy, then the table below provides a snapshot of products rated by Canstar, with links to providers’ websites. The results displayed below are sorted by Star Rating (highest to lowest) and are based on a non-smoking male professional aged 40-49.
Pros and cons of direct life insurance
The advantage of buying life insurance directly through an insurer is speed: as the products tend to be simpler in design, the underwriting timeframe is generally quicker. The main disadvantage is that, as you are not receiving professional advice, you may not be sure what type of life insurance would best suit your needs. We’ll go over the pros and cons in greater detail in the table below.
Advised life insurance
Advised life insurance is different to direct life insurance. Where direct life insurance involves going straight through an insurance provider, advised life insurance is obtained through the use of a specialised financial adviser.
Buying life insurance through a financial adviser may work out to be more cost-effective than buying directly and it also enables you to receive professional advice in relation to what insurance will best suit your needs. Some people prefer advised life insurance as it removes a lot of the confusion when it comes to choosing a policy; getting professional advice helps narrow your options in terms of policies that suit your needs.
Pros and cons of advised life insurance
The table below displays the pros and cons usually associated with most advised life insurance policies in 2017.
Life insurance through super
The third method of buying life insurance is to get life insurance through your super fund. Most super funds offer a minimum level of death cover, TPD cover and income protection for their members (although you can call them and cancel this if you wish). One of the main attractions to using superannuation life insurance as opposed to buying either directly or through an adviser is that the premiums are charged directly from your super account. They are automatically deducted, making them easier to manage, and they tend to be cheaper than market life insurance options due to being bought in bulk by the fund providers.
To check what level of life insurance you’re paying through your super fund, check your annual super statement or go online and look at what you’re paying each month for insurance premiums.
The following table provides a snapshot of superannuation funds with life & income protection insurance. These results have been sorted by Star Rating (highest to lowest) and are based on a 40-49 year old with a super balance between $100,000 and $250,000.
Pros and cons of life insurance through super
There are disadvantages as well as advantages when it comes to life insurance through super. The following table shows the main pros and cons of using this method.
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You can read a more in-depth explanation of these pros and cons here.
What would happen to your family if you died? What would happen to you if you suffered a long-term illness or injury? They are questions that none of us like to ask ourselves, but which we do need to face. Insurance can’t prevent something bad happening to you, but it can help to protect your quality of life in the event that it does.