Specialist life insurance brokers
People often ask whether it’s better or more expensive to apply for cover through a life insurance broker or direct with an insurer. There are pros and cons for all methods of buying life insurance, but ultimately you just need to make sure that you get the best cover to protect your family at the right price.
In the UK there are currently around 1,600 registered life insurance brokers so you’ve definitely got your work cut out for you to find the right one. This number is also made up of mortgage brokers and independent financial advisers that offer life insurance.
This guide looks at how life insurance brokers work and what they can do for you to get the best cover for you at the lowest price. Life insurance can be confusing and there are loads of different options, especially for people with complex circumstances and specialist requirements.
Here are some answers to your most common questions and some information that you will find useful to explain more about life insurance brokers.
SUMMARY: we understand that finding a trust worthy life insurance broker can be difficult and buying life cover is an important decision to get the best protection for your family. It’s important to make sure that you’re comfortable with the people that you’re speaking to, especially when disclosing private medical information.
"This company went above & beyond to get me cover even though I have MS, I am very happy I managed to get cover, Amazing staff, Dean went above & beyond, I highly rate this company."
by Elizabeth Turner-Long - 9th August 2023
What is a life insurance broker?
The term life insurance broker refers to a company or a person that arranges a life cover policy for a customer from a panel of insurance providers. A broker must be able to access a number of rates and premiums from their panel of carefully selected partners.
You might also come across the term life insurance agent, which is basically a person who also sets up insurance policies for customers, but generally these are employed by the insurer. This also means that they will only be able to offer or sell life insurance policies from one insurance provider, so will have fewer options.
When you apply for life insurance through a broker, you would be instantly have several insurers to choose from depending on their panel. Some life insurance brokers have a limited panel of insurance providers, whereas others might be whole of market and have all insurers.
Another important role of a life insurance broker is to make sure that you understand what options are available to you and to give you clear information. Buying life insurance online can be extremely confusing and for something as important as protecting your family, might not be the best route.
What does a life insurance broker do?
There are a few different things that a life insurance broker should do for you and ultimately how they can help you. The main point is that they should be helpful for you to find the right cover and they should save you time as well as money.
When you apply for life insurance through a broker, they will generally follow a similar process which is there to help you to get the cover that you need. Life insurance brokers will ask you questions about:
- Which type of cover you want (i.e. level term life insurance, decreasing term life insurance, critical illness cover, income protection insurance, family income benefit etc.)
- What do you want to protect (e.g. family, mortgage, income, repaying outstanding debts etc.)
- Your health and lifestyle
- The amount of cover you need (the sum assured in your policy e.g. £150,000 payout)
Once you’ve completed the ‘fact find’ process, your life insurance broker should be able to complete their research across the insurance market. This is where your broker will be able to search their insurance partners to find the cheapest premiums for the cover that you need.
How do life insurance brokers get paid?
Unlike some other financial services business, like mortgage brokers and independent financial advisers, life insurance brokers don’t charge a fee. Almost all life insurance brokers advice is free and they are generally independent.
A life insurance broker gets paid a commission from the insurance provider that they place cover with. The other good point about this is that the amount of commission that they get paid doesn’t have an impact on your premiums.
How to find the best life insurance broker
Finding the best life insurance brokers works in exactly the same way as looking for any other type of service these days.
There are several key things to look at and look for:
1) Reviews and testimonials – you should look for independent customer reviews from websites such as Feefo and TrustPilot
2) Website and online presence
3) Social media – Facebook, Linkedin, Instagram and Twitter
4) Personal recommendations – family and friends
5) Press and partnerships
6) Forums and online communities
Advantages of using a life insurance broker
There are advantages and disadvantages of using an insurance broker. There are several key benefits to someone using a life insurance broker to get their life cover sorted. Often these advantages should outweigh the disadvantages by a considerable margin, such as:
- Convenience and being able to complete your application at a time and day that suits you
- Save time and hassle by comparing premiums to several insurance companies simultaneously
- Save money on your monthly life insurance premiums by selecting the cheapest insurer based on your circumstances
- Less chance of being declined or refused cover and this is especially true for impaired life insurance brokers that specialise in medical conditions and other risks
- Protect against loss from the protection that you will be provided by the Financial Ombudsman Service (FOS)
- Get free advice so you can get the cover that you need to protect your family and your home
Disadvantages of using a life insurance broker
As with anything, there are also disadvantages when you choose to use a company or a broker for a service. The advantages are usually worth far more than any potential disadvantages, but should all be considered.
- Premiums and cost of life insurance might sometimes be higher than applying via a price comparison website or direct. This is less relevant for people with pre-existing medical conditions who should speak to a specialist due to the need for medical underwriting
- Not always convenient as some people work extremely long hours and so might not always work for you and your lifestyle. In this instance, an online route might be a better option for you
- Risk of bad advice in some instances where the customer experience might not be good and you might be at risk of poor advice
- Limited panel of insurers could also mean that you might not get the very best premiums for your circumstances
Impaired life insurance brokers
There are specialist life insurance brokers that will have specific experience and expertise in dealing with people with certain situations. These companies are often referred to as ‘impaired life insurance brokers’ which is an industry term.
Whilst we don’t necessarily agree with using the term impaired because it implies that there might be a disability or vulnerability, others do still use this terminology. An impaired life insurance broker refers to pre-existing medical conditions for most people, such as:
- High blood pressure
- High cholesterol
- Heart conditions
- Multiple Sclerosis
- Brain disorders
- Mental illness
- Blood disorders
High risk life insurance brokers
When it comes to life insurance, high risk refers to anyone with a non-standard disclosure on their application.
High risk life insurance brokers specialise in:
- Pre-existing medical conditions
- Family history of medical problems
- High BMI or overweight
- Alcohol consumption
- Drug use
- Extreme sports
- Dangerous hobbies or activities
- Armed forces
- Hazardous occupations
Any of these disclosures on a life insurance application can have an effect on your options for cover and the price that you pay.
A high risk life insurance broker is different to a standard risk insurance broker because of their expertise in these areas and the insurers on their panel. Ultimately, the role of a high risk life insurance broker is to use their experience to save you time and money.
Benefits of a high risk life insurance broker:
- Higher chance of being accepted
- Specialist insurers and products
- Lower premiums for non-standard life cover
- Quicker and easier
- Less hassle than applying to several insurers
High risk doesn’t always mean severe issues and can be fairly mild issues that you might not think will be an issue. The beauty of getting proper advice from one of these brokers is that they’ll be able to help, regardless of how serious your disclosures are.
Group life insurance broker
A group life insurance policy is a type of business protection that is also known as ‘Death in service’. The main difference between a group life insurance broker and other types of broker is that you really do need that type of advice when taking out this type of cover.
As a rule you, you can’t buy group life insurance without taking proper advice and there aren’t as many options in terms of insurance providers.
With this in mind, a group life insurance broker will be a sensible option for you and your business, to get the best cover at the right price.
Premiums for group life assurance can also vary more significantly than personal protection, mainly because you’re applying to cover several individuals up to several hundred individuals. This type of cover is most often used as an employee benefit and is paid for by the employer.
There are also many different elements to group life insurance that you should really take advice on, such as:
- Levels of cover (e.g. income multiples or benefit)
- Policy administration (i.e. leavers and joiners)
Best online life insurance brokers
There are more online life insurance brokers than there has ever been before which means that you can now access rates via a number of online price comparison websites.
The main purpose of online life insurance is to give you convenience and privacy with any sensitive medical information. There are a number of benefits for online life insurance, but there are also risks so you need to be careful with using this type of service.
Online insurance quotes are a great tool for people that know what they’re doing and are comfortable with self-service options.
The flip side of this is that it can be confusing and you can end up with the wrong product that isn’t fit for your needs. Life insurance is an important purchase to protect your family and so the decision for buying life insurance shouldn’t be taken lightly.
If you’re happy and comfortable with buying life insurance online then it’s a good option, but you should speak to an expert if you’re not 100% sure.
How to find an independent life insurance broker
There are many different types of insurance brokers and most of them should be independent, which basically means:
- They have a panel of insurance partners (providers)
- They work on your behalf and not for the insurer
- Their advice should be free of charge
- They should receive a commission for their services
Some of the main things to look out for when you’re trying to find an independent life insurance broker are:
- Do they display customer reviews?
- Where are their customer reviews collected? (e.g. Feefo, Trust Pilot, Google etc.)
- Do they charge a fee?
- How long have they been trading?
- Are they registered with the FCA (Financial Conduct Authority)?
- Do they offer advice?
- How many insurers do they work with?
- What insurers are on their panel?
- Which types of life insurance products do they offer?
- Have they been recommended to you?
You should ask as many questions as you need to so that you’re confident that these are the right independent life insurance brokers to help you.
Life insurance pays out a cash lump sum to your loved ones in the event of your death, offering you peace of mind they will have extra financial support in place. It is important to do your research and get additional support if needed, to make sure you choose the cover that is right for you and your family.