When buying insurance it is always difficult to know where to turn for help. Family and friends, the experts or do you go straight for the internet? In the modern world we have information overload, we are bombarded with information from every angle, being sold the newest fitness fad, the latest get rich quick scheme and the cheapest life insurance.
How do we know who and what to trust especially if we are new to the industry and its services or products. First of all for most things we can get a basic level of knowledge from the internet; terminology, things to look out for, recommended sites or services. From this initial research you can start to get a feel for the market leaders and the trusted places to go for information.
Take the insurance industry, the internet has had a huge impact on the insurance industry, with intangible products and services which can be provided over the phone it is a great internet based product. However the one thing that comes with buying insurance that many other products do not require is a very good knowledge of the industry, there are a vast range of products on the market from an even vaster range of insurers so how do you know which policy is right for you and your circumstance.
Take life insurance for instance, there are many places online that you can request an instant quote online and then answering a few health and lifestyle questions and filling in your direct debit details can be covered immediately. This is great if you have a really good understanding of the insurance market and know exactly what you are looking for but what percentage of the population can truly say this.
A great example of this is in setting up a life insurance policy, generally speaking if the policy is not set-up in joint names it needs to be put in trust to ensure it is tax-free and avoid becoming part of the deceased estate. If it is not set-up in trust the policy will become part of the deceased estate and could encounter a hefty Inheritance Tax Liability. Interestingly of the policies set-up online without any advice only a small proportion are set-up in trust, seeing the rest racking up the governments billions they claim each year in inheritance tax.
With the Office of Fair Trading investing time into a study covering consumer contracts, particularly those self-service contracts for online term assurance and critical illness policy it highlights the need for financial advice for many consumers.
An insurance agency has the advantage of being an expert in the field, dealing with insurance day in, day out. By consulting an insurance expert who is regulated by the Financial Services Authority and explaining your situation you are ensuring that you get the policy that best fits your needs. In addition due to the economies of scale with which insurance brokers buy policies they will often be able to negotiate you cheaper rates than if you were to go direct.