In June last year insurance commissions were in the news and we wrote this story on our blog. This month, commissions are in the news again. See this article posted yesterday on Good Returns.
We don’t really want to get into the debate all over again (yes, really…) but we think it is important for NZ consumers to be aware of what is going on in their life insurance industry.
In the story we are referring to, insurance companies are now paying commissions of 230% to get brokers to sell their products. Of course, these brokers are absolutely independent and are entitled to sell any insurance products they wish.
Now if you were a broker I’m sure you’d be happy to offer the product for which you’re paid say 150% commission rather than the product paying 230%. You'd always choose the product that's best for the consumer. It makes perfect sense... wink, wink.
Anyway, as long as NZ consumers realise that buying through a broker chews up the equivalent of the first 2 years and 3 months of your premiums, plus a little more each year thereafter for the life of your policy, then that’s ok.
But it’s also worth knowing that this is one of the key reasons it’s around 20% cheaper to buy life insurance online.
So, if you know how much life insurance you want, why not go online and save yourself a bundle?
