Commission Stays for Life Insurance

Commission Stays for Life Insurance.

On numerous occasions on this website we have highlighted to clients, readers and users the fact that life insurance, critical illness insurance and income protection policies still pay full commission.  This is not the case with pensions and investments where if you seek advice, your financial adviser must quote you a fee.

This travesty for consumer fairness, as far as we are concerned, has been reinforced in Europe with the completion of the Insurance Distribution Directive.  Many lobbyists have fought for commission to remain for insurance protection products and this has now been agreed.

What this means is the 'gravy train' will continue for direct companies and financial advisers to receive excessive commissions when compared to the works undertaken or the liability taken on when arranging a life insurance or critical illness insurance policy.

As many of you may be aware, our position is that if you can save anything from £10-£20 per month on your life insurance premium by paying a fee rather than us taking commission, you will break even after around 4 to 5 years and from then on you are saving money via a nil commission insurance protection product.

We accept that for many smaller policies, with small premiums, it would not be economical to pay a fee for financial advice.  However, we suggest the Insurance Distribution Directive has missed a trick for consumer protection where it should have forced any life insurance protection quotation to include terms on both a commission basis and a nil commission basis to allow the consumer to choose which is the best option for them to fund their life insurance advice.  This is exactly what we do with our clients who require life insurance, critical illness insurance or income protection policies.  

Could you save money? 

Ask us for a quotation for a comparable insurance protection product on a nil commission basis to see how much money you may save.

Read about Commission Discounts on Life Insurance