Life assurance and critical illness- where do I start?

squishyclaire

My partner and I were reviewing our finances and we want to look into getting a different life assurance and critical illness policy. We took out a policy through a financial advisor and I really don't think that we got the best deal. I know that all the charges are unique per case but I really got the impression we got a policy that would also give a payout to the advisor, rather than being the best deal for us.

The thing is I just don't know where to start to apply for this on our own. Could anyone advise me what to do. We may find that we have got the best deal but I want to make sure that this is the case.

dunstonh

but I really got the impression we got a policy that would also give a payout to the advisor, rather than being the best deal for us.

Do you think that retailers provide you goods at no profit?

Did you not see or ask to see the research showing why that provider was chosen?

Do you think that the alternative distribution channels wont be making money on the transaction?

The thing is I just don't know where to start to apply for this on our own.

That is why you get someone to do it and why it costs a little more for doing so. A bit like hiring a decorator instead of doing it yourself or getting your car serviced instead of doing it yourself.

We dont know your needs so cant say whether a level term, decreasing term, family income benefir or whole of life assurance is best (or combination as is usually the case). You say partner instead of spouse. So that suggests you are unmarried so you will probably be looking to place the life cover in trust. You also mention critical illness. So, you need to find out if your current plan has guaranteed premiums (and not reviewable) and is comprehensive and not budget. Too many people move from guaranteed comprehensive plans to reviewable (or even yearly renewable term) and budget cover thinking they are looking at like for like.

squishyclaire

I welcome you comments and thank you for your advise to help me compare policies.

However, as regards your earlier comments, fair enough that advisors should get some renumeration from setting up policies. Nevertheless, surely morally and ethically an financial advisor should be what they describe themselves as "an advisor" not a salesperson. I would hope that they take individual circumstances into a account which I don't think happened to us rather than selling a generic policy which lines their pocket rather than has their clients' best interests at heart.

dunstonh

Nevertheless, surely morally and ethically an financial advisor should be what they describe themselves as "an advisor" not a salesperson. I would hope that they take individual circumstances into a account which I don't think happened to us rather than selling a generic policy which lines their pocket rather than has their clients' best interests at heart.

The adviser has to justify the product they are recommending. You cannot just pick one out of the hat (unless you are a multi-tied adviser where you can or a tied agent where you only have one product available). Part of the file research would be a price comparison. If the best product isnt chosen, the reasons why have to be shown. There are good reasons why the best priced product isnt chosen quite often. Lack of options or when the price is only a few pence difference and the second place provider has better options and terms.

That is the requirement and no doubt there is a small minority that dont do that. So, the best option is always ask to check the research. Most advisers will show it to you and some will do it without asking. Those that wont show it have something to hide (maybe they didnt have research or the research doesnt stack up).

If you really are paranoid that an adviser would pick the fifth placed company instead of the first place because it pays them an extra £5 then agree the remuneration up front to a fixed amount. This is known as customer agreed remuneration.

squishyclaire

Your comments are most appreciated and I certainly did not know about them having to have research. I certainly feel that the advisor did not do any research at all he just said that this was a good company and we should apply to them. I would now be interested to see what he research to see what comparisons he did make.

Can I request this information from him now? The policy has been set up around 11 months. Do we have any comeback if he hasn't compared the market so to speak?

dunstonh

I certainly did not know about them having to have research. I certainly feel that the advisor did not do any research at all he just said that this was a good company and we should apply to them.

Only IFAs have to research company. Tied agents and multi-tied do not. I do believe that mortgage and protection only advisers dont have to fully research but can pick a company but don't hold me to that.

IFAs have to have a minimum of three companies quoted. Although with modern technology, the quote portals we use usually access far more than that and record prices for them all. The old 3 provider rule goes back to the pre computer days when we had to ring to get information and the rule has never been updated.

I would now be interested to see what he research to see what comparisons he did make.

Can I request this information from him now?

Ask him. There should be no problems at all seeing it as it would list the companies quoted and their premium on like for like basis. If best priced company was chosen, then there would be no notes. If a company with a higher price was chosen there would need to be notes as to why that was chosen over another.

Do we have any comeback if he hasn't compared the market so to speak?

If it was an IFA, then yes you do. If it want an IFA then no.

I will just remind you in that cheapest isnt always best. Usually, the top handful of companies are very closely priced. Where that is the case, you will usually go with the one that offers the best terms (such as guaranteed insurability on certain events, children cover, ability to amend etc). If you did go with company number 3 for one of those reasons though you would have it documented.

squishyclaire

Thanks, I certainly don't feel that the advisor did any of this research and I total appreciate that they might not pick the cheapest quote. However I would very much like to look into the history of why we ended up with the company we did.

Thanks again for your trouble and your advice. It is nice to get an insider view.