Advisor/Broker for Life and Income Cover or Buy Direct?

B

Bagman

Registered User
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Hi all,

I need to sort life assurance and income protection.

My query is whether I should go through a financial advisor or broker, or just use a price comparison site or indeed buy direct from providers?

Presumably advisors bring the benefit of experience dealing with admin and claims etc so I am wondering if it might be worth paying extra for this service?
 
Policies are not cheaper if bought direct from the assurer.

Typically, the best deals are from discount brokers, who are execution-only, no advice.

If you want simple life cover, and you know what you want, buy from a discount broker, who takes less commission, and passes the savings on to you.

I am curious about price comparison websites for life cover, is there such a thing?
 
Income protection is not sold as widely as life cover, and may require using a traditional broker. Maybe.

Can you get it through your job?

I pay 0.85% of my gross for IP and specified illness cover, and I get tax relief on that.
 
Hi Protocol,

Thanks for your reply.

Bonkers.ie do price comparisons for both life cover and income protection now.

400k dual life cover for 20 yr term coming up at €57 p/m (via Zurich) which appears reasonable.
 
Protocol said:
Income protection is not sold as widely as life cover, and may require using a traditional broker. Maybe.

Can you get it through your job?

I pay 0.85% of my gross for IP and specified illness cover, and I get tax relief on that.
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That is interesting. I work for the HSE. Havent gotten much info from HR but might be worth trying Cornmarket for quotes I suppose.

I am happy to get both after reading advice on here extensively. I have budgeted about €170 p/m for dual life cover and 2 IP policies.
 
Be careful about income protection - many policies only pay out in very restricted circumstances and for limited periods of time and may be poor value for money.
 
ClubMan said:
Be careful about income protection - many policies only pay out in very restricted circumstances and for limited periods of time and may be poor value for money.
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Thanks Clubman, appreciate your reply.

It's an interesting debate and people do seem to often favour one over the other.
It was one of the reasons I queried that an advisor might be the way to go here, knowing which companies are better to deal with etc.?

I had decided to get decent life cover and maybe a reduced cover on the IP but at least have something in place for peace of mind.

Maybe it is expensive to get both but I am firmly in 'sorting out my finances' mode and have cut back on a lot of expenses elsewhere.
 
Bagman said:
Hi Protocol,

Thanks for your reply.

Bonkers.ie do price comparisons for both life cover and income protection now.

400k dual life cover for 20 yr term coming up at €57 p/m (via Zurich) which appears reasonable.
Click to expand...

I put two 40yo non-smokers into www.labrokers.ie, 400k over 20 years, and I got AVIVA 646 per annum or 54 per month.

Yes, your 57pm seems reasonable.
 
Some of the IP plans sold by Cornmarket to union members in the PS seem expensive at first glance:


1733965955964.png
 
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ClubMan said:
Be careful about income protection - many policies only pay out in very restricted circumstances and for limited periods of time and may be poor value for money.
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What restricted circumstances? Income protection policies pay out for any illness or injury that prevents you doing your job.
 
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Bagman said:
Hi Protocol,

Thanks for your reply.

Bonkers.ie do price comparisons for both life cover and income protection now.

400k dual life cover for 20 yr term coming up at €57 p/m (via Zurich) which appears reasonable.
Click to expand...
You do know that bonkers.ie are the broker?

I see on their life cover quote system, the minimum term is 10 years...which just so happens to be the minimum term required to get paid the full commission rate on a policy...
 
Bagman said:
Thanks Clubman, appreciate your reply.

It's an interesting debate and people do seem to often favour one over the other.
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I'm not sure what you mean. Life assurance and income protection are very different products and not really interchangeable.
 

Dos and don’ts of income protection policies

A relative has been advised to increase their income protection policy following a review. They currently have cover for around 30 k pa after 6 months off sick. An advisor has advised them to go for a 100k policy. It will cost just over 200€ per month. Policy owner is 52 years old. Health is ok...
www.askaboutmoney.com
 
ClubMan said:
I'm not sure what you mean. Life assurance and income protection are very different products and not really interchangeable.
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I suppose what I mean is if choosing one product some people seem to have a preference for one over the other, depending on circumstances etc.

In my case I am hoping to get both sorted together
 
Steven Barrett said:
You do know that bonkers.ie are the broker?

I see on their life cover quote system, the minimum term is 10 years...which just so happens to be the minimum term required to get paid the full commission rate on a policy...
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Fair point. A price comparison site is a broker without the personal experience hence logically a cheaper price, whether that service is good value or not is another thing.

That is interesting about commission being related to the term. So much of Irish personal finance system is so cloak and dagger that it tends to put a lot of people off sorting this altogether which is not ideal.

An advisor previously told me he was recommending 20 year term to me because it was better for me not him, if he was looking out for himself a shorter term would bring repeat business and more commission. Is this accurate?
 
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Bagman said:
Fair point. A price comparison site is a broker without the personal experience hence logically a cheaper price, whether that service is good value or not is another thing.

That is interesting about commission being related to the term. So much of Irish personal finance system is so cloak and dagger that it tends to put a lot of people off sorting this altogether which is not ideal.

An advisor previously told me he was recommending 20 year term to me because it was better for me not him, if he was looking out for himself a shorter term would bring repeat business and more commission. Is this accurate?
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It doesn't work that way. There are various different commission structures ranging from 90% to 200% (massive clawback on these if clients stops paying in the first 4/5 years).

I use the 100% option. The terms are 10% for each year term up to 10 years....hence the bonkers site having a minimum term of 10 years. Taking a 20 year term won't increase the commission to 200%, it will stay at the max of 100%.

The advisor is correct in advising the longer term (up to the age you stop working is what should be the term). The price is fixed and won't change. If you took out say a 5 year term, you will be priced at your age in 5 years time and will therefore be more expensive. You may have got health issues and it make be more difficult to get cover*


*there is of course the continuation option but this just means no underwriting, the price is still at the price of the older you.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Steven Barrett said:
It doesn't work that way. There are various different commission structures ranging from 90% to 200% (massive clawback on these if clients stops paying in the first 4/5 years).

I use the 100% option. The terms are 10% for each year term up to 10 years....hence the bonkers site having a minimum term of 10 years. Taking a 20 year term won't increase the commission to 200%, it will stay at the max of 100%.

The advisor is correct in advising the longer term (up to the age you stop working is what should be the term). The price is fixed and won't change. If you took out say a 5 year term, you will be priced at your age in 5 years time and will therefore be more expensive. You may have got health issues and it make be more difficult to get cover*


*there is of course the continuation option but this just means no underwriting, the price is still at the price of the older you.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
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Thanks Steven, very helpful.

As you say I do appreciate the advice was solid as it absolutely means cheaper cover over time, but possibly a bit of over explaining on the advisor's part.

It is a strange dynamic when speaking with advisors who get paid by commission, I can understand its not a straightforward conversation for either party. In this case he spent so long talking about commissions, to convince me he wasnt being influenced by them, that ironically I started to lose a bit of faith in the advice!
 
Protocol said:
Some of the IP plans sold by Cornmarket to union members in the PS seem expensive at first glance:


View attachment 9795
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As far as I'm aware, Cornmarket's scheme allows them the flexibility to increase the rate in the future for the same level of cover, depending on the profitability of the scheme as a whole, claims experience etc. Any time I've looked at it, Cornmarket tends to be cheaper for older people than buying an individual policy, but dearer for a younger person. And an individual policy can be bought at a rate that is fixed for the full duration of the policy and won't increase in the future. For a public servant, it's worth comparing the two.
 
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