23 December 2024
Life insurance broker
6 minutes
A life insurance broker is there to help you find the right life insurance policy for you and your family. They have all the expertise necessary to manage this process at every point: whether you’re just signing up, looking to change or upgrade your policy, or need to make a claim.
What is a life insurance broker?
A life insurance broker is a qualified financial professional who acts as an intermediary between you and insurance providers. They take the time to understand your unique circumstances, family situation, and financial goals before searching the market for the life insurance policy that suits you best.
In the UK, life insurance brokers are authorised and regulated by the Financial Conduct Authority (FCA). This means that they must adhere to strict industry standards. If the insurer you’re speaking to can’t prove that they’re registered with the FCA, steer clear.
Unlike insurance agents who typically work for a single company, insurance brokers, including life insurance brokers, are independent and can access policies from multiple insurers across the market. This means they can compare a wide range of products and negotiate on your behalf to find cover that truly matches your needs and budget.
Read more: What is life insurance? A complete guide
What does a life insurance broker do?
A life insurance broker performs several key roles to help protect your family’s financial future. These are the sorts of services you can typically expect:
- Conducts detailed research: A broker’s first step is to thoroughly understand your situation. They’ll talk to you about your financial commitments, family circumstances, health status, lifestyle, and future goals. This includes gathering specific details about your mortgage, dependents, income, and what you can realistically afford in monthly premiums. This information helps them identify the most appropriate type and level of cover for your needs.
- Searches the whole market: Using their access to a wide range of insurers, brokers compare different policies and premiums across the market. This process is far more comprehensive than what you could achieve on your own or through a single insurer, and it’s customised. For example, if you have a particular health condition, your broker will seek out insurers that typically offer the most favourable terms.
- Handles paperwork and administration: Brokers take care of the time-consuming administrative aspects of securing life insurance. They’ll complete application forms accurately, ensure that medical information is properly disclosed, and manage all the communication with insurers. This is particularly valuable when additional medical information is required or if there are complications with your application. Their expertise in handling these documents helps avoid errors that could potentially invalidate your policy.
- Calculates appropriate coverage levels: Brokers help determine exactly how much cover you need by considering your unique situation. They’ll also explain the different types of life insurance and advise which suits you best. This ensures you’re neither over insured (and paying too much) nor underinsured (which could leave your family financially vulnerable).
- Provides ongoing support: A broker’s role continues after your policy is in place. They act as your point of contact for any questions or concerns about your coverage, and will help you review and adjust your policy if your circumstances change — for example, if you move house, have children, or change jobs. If you ever need to make a claim, they’ll guide your family through the process, ensuring everything is handled correctly and efficiently.
The real value of a broker lies in their expertise and objectivity. They’ll explain complex policy terms in plain English, highlight important exclusions you might miss, and help you understand exactly what you’re signing up for. This insight helps you make informed decisions about your life insurance coverage, rather than just making your choice based on price alone.
Is life insurance cheaper through a broker?
Life insurance through a broker isn’t always cheaper in terms of the base premium, but it can often provide better value for money overall.
In particular, the access they have to the whole market is enormously beneficial. It means that they can compare prices across numerous insurers, something that would take you hours to do yourself. They also often have access to exclusive deals and discounts that aren’t directly available to consumers.
Many brokers have strong relationships with insurers and understand their underwriting criteria. This means they can direct you to insurers that are more likely to offer favourable rates for your specific circumstances.
So while the monthly premium might not always be lower than a direct deal, working with a broker could save you money in the long run. With a good life insurance broker in your corner, you’ll not only have the right coverage at a fair price, you should also be protected against any nasty surprises if you need to make a claim.
How do I choose a reliable life insurance broker in the UK?
Hunting for the right insurance broker can feel like a bit of a minefield — there are a lot of options to choose from. Fortunately, by working through the following criteria, you should be able to find the broker who works best for you:
- Check their FCA regulation and authorisation: This is your essential first step — and it’s an important one. Every legitimate insurance broker in the UK must be authorised and regulated by the FCA. You can verify a broker’s status by visiting the FCA website and searching for them. Any hesitation or vagueness from a broker about their FCA status should be an immediate red flag.
- Look for relevant qualifications and professional memberships: Professional qualifications demonstrate that your broker is committed to their work and to best practice. Look for qualifications from the Chartered Insurance Institute (CII), such as the Certificate in Insurance (Cert CII) or the more advanced Diploma in Insurance (Dip CII). Membership in professional bodies like the British Insurance Brokers’ Association (BIBA) is also valuable, as these organisations require members to maintain high professional standards and follow strict codes of conduct.
- Research their reputation: Feedback from existing customers can provide valuable insights into a broker’s service quality. Look for detailed and impartial reviews that discuss how they communicate, how efficiently they handle applications, and how good their support is during the claims process. Pay particular attention to reviews from customers who’ve been with the broker for several years or who have made claims, as these experiences often reveal the true value of a broker's service.
- Assess their communication style and transparency: A reliable broker should display clear, open communication from your first interaction. They should explain their process thoroughly, be transparent about their commission structure, and never pressure you into making quick decisions. During your initial consultation, they should spend more time asking about your circumstances and explaining your options to you than trying to sell you a policy.
- Consider their market access and insurer relationships: The best brokers have relationships with a wide range of insurers and can access various policies. Ask about their panel of insurers and how they select which ones to approach for quotes. They should be able to explain why they recommend certain insurers over others and demonstrate a thorough understanding of different insurers’ underwriting approaches.
- Evaluate their ongoing support services: The relationship with your broker shouldn’t end once your policy is in place. Enquire about their after-sales service, including policy reviews, support for making changes to your coverage, and assistance with claims. A good broker should offer ongoing support and be proactive about reviewing your coverage as your circumstances change.
Ultimately, it’s a good idea to trust your instincts about the firm you choose to work with. While this is subjective, how comfortably you feel with your broker is important. They should present themselves professionally, respond promptly to you, and make you feel confident in their ability to handle your insurance needs. If something feels off during your interactions, or if they seem more focused on making a quick sale than understanding your needs, consider giving your business to someone else.
Is it worth getting insurance through a broker?
Life insurance can be a complex and sensitive undertaking. Having a life insurance broker on your team to discuss your options with you can help you navigate this landscape easily and efficiently. Brokers have access to the whole market and can often find deals you wouldn’t discover on your own. They’re especially helpful if you have pre-existing health conditions or complex circumstances, as they know which insurers are most likely to offer favourable terms.
While brokers do come with a cost, their expertise can save you money down the line by ensuring you have the right level of cover and protecting you against any issues that could invalidate your policy. They also provide ongoing support, including help with claims.
If you’re looking for further advice, speak to the team at Howden. Our life insurance experts are on hand to answer any questions you may have. Contact us today.
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