Broker or IFA

He-man_2

Hiya

I need to sort life insurance and critical illness since having a sprog. Is a specialist broker better than an IFA?

Also if a broker isn’t completely whole of market does that matter? They won’t give me a list of the providers on their panel so can’t work out how close to whole of market they are. Are the likes of moneysupermarket or active quote whole of market? The MSE article doesn’t say.

Thanks in advance

caprikid1

"They won’t give me a list of the providers on their panel so can’t work out how close to whole of market they are."

Personally if they won't give you a list of who is on their panel look for another, they should be really willing to provide this, I suspect they are single tie could even be loaded premiums.

Whole of market does not mean the whole market, merely a good fair representation of the marked.

I suspect you are more likely to get specialist insurance help from a broker as IFA's tend to be more focused on investments and pensions.

He-man_2

https://forums.moneysavingexpert.com/discussion/comment/81907191#Comment_81907191

thanks - what are loaded premiums?

MyRealNameToo

I was recommended an IFA for my Relevant Life and Income Protection (I dont like CI) and they were terrible. Took totally the wrong approach, received declines and didnt feel as if they are interested at all. I switched to a broker, they were very confused by the IFA's approach and not only did they get favourable terms agreed on the IP it was with the insurer that the IFA had received a decline from.

I've a vague memory that some IFAs dont themselves do the insurance but have a pet broker (sometimes in house) but one of the IFAs that come here will correct me if I am totally wrong.

Many of the aggregators dont really do life insurance, instead they have partnered with a web friendly broker who exposes their panel to look like an aggregator with a list of prices from different insurers but unlike a true aggregator you will always be buying from that broker rather than being passed through to different sellers depending on which option you choose. Like most aggregator type solutions they are best for run of the mill cases, if you have unusual medical conditions or a complex history then you are probably better off with a more traditional broker who will talk to the underwriters before formally submitting your application.

caprikid1

https://forums.moneysavingexpert.com/discussion/comment/81907194#Comment_81907194

Loaded premiums are where the commission added on is negotiated higher than normal, this makes the policy often more expensive. Some larger broker firms are able to negotiate amazing commission deals which are not passed to the customer effectively paying them extra commission but the premium remaining the same.

tacpot12

I agree with MyRealNameToo. Critical Illness insurance is only really suitable when you are living on benefit income and always will. If you have a job, and especially if you have a mortgage, you really need income protection insurance, not critical illness insurance.

Income protection insurance can be expensive, but you can reduce the cost by deferring the start of payments for longer periods (e.g. 12 months). However, you will need emergency savings to cover the period before the insurance starts paying out. Such insurance also offers the choice of covering situations if you want work in your own line of work, or in ANY job. The option that only cover you if you can't work in your line of work is more expense, but will pay out even if you could do a menial job (for not much money) so if you can afford it, the cover for if you can't do you own line of work is more valuable.

dunstonh

. Is a specialist broker better than an IFA?

In respect of IFAs, it can depend on the IFA firm.

For example, most IFAs (individuals) only deal with investment class business and maybe only do the odd bit of protection. However, if the IFA (firm) has mortgage brokers and insurance advisers as part of it, then they will be dealing with protection far more frequently. So, rather than use an IFA (individual), the IFA (firm) would likely get you to speak to a mortgage/protection adviser within the firm.

If you have complicated health issues, then experience is important. If you have clean health, then anyone can do it.

He-man_2

https://forums.moneysavingexpert.com/discussion/comment/81907288#Comment_81907288

thanks - I get a decent PIH policy through work. The broker has suggested critical illness on top. Which I wasn’t sure it was needed. But I’m a single parent so would like to err on the side of being over insured rather than under

He-man_2

Thank you makes sense - and assume ifa’s charge for the insurance advice rather than earn via commissions?

MyRealNameToo

Group IP can be a little different, they are much more likely to go for an early settlement with a lump sum that isnt close to the net present value of future payments but many jump at the idea of lump sum. Personal IP won't do that and there are people who make 40+ year long claims.

Presumably you see yourself being with this employer forever or will cross the IP bridge at a later date if you move and go to somewhere with a less generous cover?

With CI just make sure you understand the policy:

1. It will only payout for certain conditions to a certain definition. You can get a very serious illness that takes your out of work but its not on the list so the policy doesnt respond. On the flip side you could be lucky and recover quickly from something on the list but you're still entitled to the payment

2. The list won't change for as long as you have the policy, this can cause issues when medical understanding and treatments move on. For example some older policies provided cover for certain conditions if open chest surgery was required but a number of things that used to cover now arent because they are done with keyhole surgery. Similarly have seen policies requiring a certain protein marker above a prescribed level but this is now considered a poor indicator and so hospitals no longer test for it so no one can claim because the level is unknown (it needs to be done within 2 days of the incident so can't be done later). Newer policies have different wordings to reflect the change in practice but doesnt help anyone still in old ones.

He-man_2

https://forums.moneysavingexpert.com/discussion/comment/81907664#Comment_81907664

thanks - yes would but IP when I move jobs. Appreciate costs might go up then depending on health but money is tight so happy to do that for now.

Thanks - hadn’t thought of that re clinical advancements. Will see if policy wording covers it. The policy was a royal London one and illness list was pretty extensive.