|
Anyone who has tried shopping online for travel, home or motor insurance will already have discovered that it is possible to get a greater level of cover for a lower premium by using the web.
Insurance companies and brokers are now starting to offer online quotations for life insurance, although there are fewer online players offering this product. Many of the big general insurance providers, such as theaa.com, part of the AA insurance company, don't yet offer life insurance on the web.
The simplest and most web-friendly form of life insurance is term assurance. Other products that cover you for serious illness, such as critical illness, are not widely available yet on the web because they are more complex and require detailed medical information.
What is term insurance?
Term assurance offers you cover for a specified number of years. Because it is only for a fixed term, as opposed to the whole of your life, this makes it cheaper than conventional life insurance.
Some of the cheapest deals on offer at the moment come from new entrants, such as Direct Line and Marks & Spencer. But the premiums quoted on term assurance policies can vary widely, so it makes sense to get several quotes. And one of the best ways to do this is to shop around on the internet.
Term assurance is a no-frills protection product that pays out a lump sum if you die within the specified term.
• If you live to the end of the policy, you don't get anything back;
• If you have a staff job, your employer may include life insurance as part of the pay package, particularly if you have taken out a workplace pension;
• If you leave your job, become self-employed or work as a consultant, you will have to arrange your own life cover;
• The older you are, the more expensive the premiums will be.
There are two types of insurers online: "direct providers", who sell their own products on the web or use a preferred provider, and "supermarkets", which aggregate quotes from several different providers.
Al-Karim Govindji, senior internet analyst with Gomez, a company that provides analysis of financial providers online, said it is useful for customers to know how the website insurer works. Are they selling just one product, or are they working on a commission basis for a number of providers? This will affect the spread and variety of quotes you are offered.
The providers who do offer a web-based life insurance product are: Direct Line, Eagle Star, Norwich Union, Prudential, Royal&SunAlliance, Scottish Amicable and Scottish Provident.
Royal&SunAlliance and Direct Line have both scored highly for web-based general insurance products in a recent survey by Gomez. Direct Line came top of the Gomez general insurance product scorecard. The criteria included ease of use, access to policy details, good site design and navigation, and consumer confidence in the brand and the provider.
The best search engines on the web are quick and simple and give you an instant quote. You are asked for your age, whether you are a smoker, the level of cover you require (most independent financial advisers suggest a level of between ?100,000 and ?150,000 or three to four times your gross annual salary). You will also be asked for the length of the term of the insurance, plus whether you are a smoker.
Take a married couple in their early thirties who have never smoked and who are looking for joint life term assurance for 10 years for ?100,000, and a single man aged 60 who is a smoker and wants ?200,000 worth of cover.
What can the web offer them?
Eagle Star offers online insurance for people between 17 and 64 but will not extend cover beyond the age of 70.
For the married couple aged 33 and 34 wanting a sum insured ?100,000 (not inflation-linked), the monthly premium would be ?16.79. If they wanted cover for ?200,000 over a term of 10 years, the monthly premium would be ?31.11. For the same sum over a term of 25 years, the premium would rise to ?46.97 a month.
For a man aged 65 who is a smoker and wants level term insurance of ?200,000, the maximum term he can get is just five years of term at a cost of ?286.51 a month.
BallaBrokers
One independent financial adviser and insurance broker that has a website presence is BallaBrokers.com, based in Douglas, Isle of Man. You can't get an immediate quotation as you can with Eagle Star, but you can usually expect a reply within 48 hours. They reply arrives by email, with a key features document explaining the policy.
The quote for a married couple in their thirties looking for level term insurance of ?100,000 for 10 years was ?7.99 a month from Swiss Life. For this quotation, BallaBrokers was also offering a cash-back of three month's premiums on the policy.
Some sites give you a selection of quotes, from which you can choose either the cheapest, or the provider you feel comfortable doing business with.
Easy-Quote
For example, Easy Quote offered three sample quotes for the married couple, and three for the man in his sixties.
For the married couple in their thirties, the quotes for a monthly premium for term insurance of ?100,000 were: C&G ?10.50; Scottish Equitable ?11.84; Scottish Widows ?11.88;
For a man born in 1940, term insurance for five years, sum insured ?200,000, the quotes were:
L&G ?146 Scottish Equitable ?189.98 Standard Life ?211.14
• Marianne Curphey is the author of E-cash, a step-by-step guide to managing your money online. Find out how to keep control of your own finances, search online for a mortgage, move bank accounts and invest in shares. Buy it at Bol
|
Latest press releases 
