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Life Insurance Premium Comparison

Is Life Insurance cheaper “direct” or through a broker?

Updated 13 March 2019

Are your life insurance premiums more than double what you need to pay?Life Insurance Compare Us To Others

A common misconception is that you will get cheaper life insurance if you buy “direct”, rather than through a life insurance broker like Insurance Watch.

To debunk this myth, we have obtained life insurance premiums from some of the direct insurance brands heavily advertised on television, and compared these to the cheapest premium available from the Insurance Watch range of insurers.

Who has the Lowest Life Insurance Premiums?

The sample quotes below are for a male and a female living in Victoria Australia, aged 40 years old, non-smokers and seeking $500,000 life insurance cover.

The direct insurance brands, rather than being lower in cost, actually have life insurance premiums on average more than double those from Insurance Watch!

Why is this the case? Higher marketing budgets, lower retention rates and less information about applicants are just some of the reasons why direct brands cost more.

To check if a lower premium is available for your policy go to Compare Quotes.

Life Insurance Premium Comparison – who is cheapest?

Male 40 years old and a non-smoker: Monthly Premium Percentage Higher
Insurance Watch – AIA $ 27.92
Allianz Life insurance $ 40.33 44%
Medibank Life insurance $ 59.30 112%
AAMI Life insurance $ 63.16 126%
Insuranceline Life insurance $ 63.24 126%
NRMA Life $ 63.53 127%
Virgin Life insurance $ 68.50 145%
Real Life Insurance $ 70.81 153%
Guardian Life insurance $ 74.88 168%
Woolworths Life insurance $ 76.50 173%
  Average: 130%
Female 40 years old and a non-smoker: Monthly Premium Percentage Higher
Insurance Watch – ClearView $ 22.12  
Allianz Life insurance $ 31.31 41%
AAMI Life insurance $ 49.64 124%
Medibank Life insurance $ 50.13 126%
Insuranceline Life insurance $ 50.22 127%
Virgin Life insurance $ 54.00 144%
NRMA Life $ 55.44 150%
Real Life Insurance $ 57.08 158%
Guardian Life insurance $ 60.36 172%
Woolworths Life insurance $ 61.39 177%
  Average: 135%

The above life insurance premium comparisons are accurate as at 13th March 2019 and do not include membership or other discounts. The Insurance Watch quote used is the cheapest of the insurers we compare and the premium shown is also BEFORE the Insurance Watch 10% cashback offer.

Why it is important to compare premiums

As noted by CHOICE Australia a number of the direct brands listed above are actually owned or distributed by related parties. Therefore websites which only compare quotes from direct brands may actually be comparing a limited number of underlying insurance companies.

Similarly, “Awards” and “Reviews” which only consider direct life insurance brands will only be comparing this pool of higher priced options and not the cheaper, more benefit rich policies from life insurance brokers.

When comparing, it is important to ensure that the quotes you obtain are for the same payment frequency. “Direct” premiums are often quoted on a fortnightly basis rather than monthly, making them appear more affordable.

Benefits and Exclusions are also important

Of course, when shopping around you should not just look for the cheapest life insurance option but also consider the benefits offered by each policy. See our tips and traps when buying Life Insurance.

Buying “direct” can mean that your policy will have more exclusions or restrictions due to the limited underwriting done at application time. It also means that at claim time you will not have the support and assistance of a broker like Insurance Watch to act in your best interests.  Claims statistics show that direct life insurance policies have a lower claims acceptance rate than policies sold by brokers.

Pressure selling tactics

The 2018 Royal Commission revealed the high pressure sales tactics used by the call centres of direct insurers. Often this involves keeping the customer on the phone until they agree to purchase, without the opportunity to make price comparisons. When consumers do make these comparisons they often find that the policies are poor value as evidenced by the 1 in 5 who drop their insurance policies in the cooling off period.

Insurance Watch provides online comparisons of premiums and benefits for all the insurers we cover. No personal information is required to view these, so you don’t need to worry about being hassled by call centre sales representatives.

Click below to start comparing:

Want the convenience of no medicals, a simple online application and instant cover, without an exorbitant premium? Then click below:

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