Looking for life insurance straight from a provider? Get cover without the hassle of a financial planner.
Direct life insurance is different to traditional retail cover: it's purchased directly from an insurer, as opposed to buying through an adviser or broker. Buying direct usually only requires a limited level of medical underwriting or non at all. Direct term life insurance can be obtained:
- From an organisation’s branch office
- Over the phone
Compare direct life insurance policies below
What's in this guide?
Should I buy cover direct?
How does buying direct compare to other methods?
Should I buy direct (without a financial planner)?
This is a matter of preference and will come down to weighing up the pros and cons of buying direct, and then deciding if it's right for you.
- You can save time. Direct life insurance is designed for people who need life insurance but don't have the time nor inclination to go through the process of comparing products with an insurance consultant or financial planner. It fills a gap in the market for people looking for a quick solution while still receiving an adequate level of cover.
- Immediate death cover. Direct life insurance policies often provide immediate death cover once the application has been received. You're not required to go through the entire underwriting process, which makes the purchase process more convenient if you know what you need from a policy.
- It's easy to purchase. Most policies don't require you to undertake medical underwriting to receive approval. Cover can usually be arranged online or over the phone, ensuring the application process is fast and straightforward.
- Bundle cover. Some insurance companies allow you to add benefits like total and permanent disablement, trauma and income protection to your policy.
Strangely, the same aspects that make direct life insurance very attractive can be detrimental. Buying an insurance product over the counter means that you don't have time to compare and review products with a certified financial consultant.
- Less comparison of policy options. Purchasing through an insurance consultant enables you to review hundreds options at once.
- More responsibility for you. You will have to read through all of the policy clauses and have a clear understanding of the policy exclusions without the assistance of a financial planner. This will involve being clear on the different definitions of for topics such as pre-existing medical conditions, the policy payment structure and specified conditions covered.
- Cover may not be as closely tailored towards your needs. Cover may not be as closely tailored to relevant to the your needs. The benefit of purchasing through a financial planner is that the policy found through the comparison process will have benefits and features that are actually required for your situation. The comparison process can weed out expensive extras that aren't actually required.
- Price. While not going through extensive medical underwriting may appear more convenient, it also means that the insurer may make assumptions about your health and your overall level of risk. This can also cause premium payments to be driven up.
'71% less likely' was calculated using figures from ASIC's Report 498: Life Insurance Claims: An Industry Review. The report states that the average declined claims in a non-advised policy is 12% in comparison to an advised policy at 7%. 12% (non-advised) is 1.71 times the amount of 7% (advised) hence a 71% less chance of an advised policy claim being declined.
When it comes to making a claim, you will need to do all the legwork yourself, liaising with doctors and chasing up your medical records. And even if you have no pre-existing conditions, the time involved can be weeks or even months, during which you will be without finances.
A financial adviser takes care of the legwork for you, dealing directly with the insurer and advocating on your behalf. So when considering buying your life insurance direct, be aware that the time saved when applying for cover can often be spent many times over at the other end of the process.
How does buying direct compare to other methods?
Direct life insurance works as the name suggests. You'll compare policies directly either on a comparison site or on the insurers website. When you make a purchase, it will be directly from the brand without any commissions going to an adviser. Here's how buying direct compares to the options you have:
|How they compare?||Direct policy||Policy provided with advice|
|Medical questions||No detailed medical examination, just simple questions||Fully underwritten - you will need to go through a detailed medical and lifestyle questionnaire|
|Occupation||Not asked for||Full disclosure|
|Is advice provided?||No||Yes|
|Is a statement of advice provided?||No||Yes|
|Will an adviser advocate for me in the event of a claim||No||Yes|
|Can you claim with more than one policy from the same insurer?||No, premiums will be refunded for an extra policy||If disclosed, additional cover can be included|
|Exclusions||Direct policy||Policy provided with advice|
|Suicide or intentional self-inflicted injury or illness||Excluded||Excluded in the 13 months|
|Under the influence of drugs or alcohol||Excluded (unless under the direction of a medical practitioner)||Not excluded|
|Working underground or over 10 metres||Excluded||Maybe excluded (details are assessed when you apply)|
|If you mountaineer, rock climb, scuba dive or participate in dangerous activities.||Excluded||Maybe excluded (details are assessed when you apply)|
|Flying an airplane||Excluded (unless as a passenger on a regularly scheduled flight).||Not excluded|
Direct life insurance in detail
Are pre-existing conditions covered?
While direct life insurance is fast and easy to obtain, with few questions to answer and no need for medicals, this very lack of information could become a problem at claim time. That’s because direct insurers don’t ask many questions when you apply for cover, but many reserve the right to perform underwriting retroactively when you make a claim.
So if you have neglected to inform them of a pre-existing condition (quite possible, unless you have studied the fine print and are aware of the exclusions and conditions that must be declared), they are legally within their rights to deny your claim.
Consider a tailored policy from an adviser
A financial adviser knows what is and isn’t covered and would have asked you the important questions upfront. This allows you to tailor cover to your specific circumstances. Before you obtain a direct life insurance quote, make sure you do your homework.
There are some brands that offer a more tailored policy, with a more detailed questionnaire upfront.
|Virgin||Virgin offers two types of cover: Quick & Easy and it's Tailored cover. On it's tailored option you'll need to answer extensive health and lifestyle questions when you apply.|
|NobleOak||Life Insurance from NobleOak is full underwritten. This means you go through an extensive health and lifestyle questionnaire then your premium and cover is tailored according to your answers.|
Direct life insurance is growing in popularity in Australia and is only expected to continue, with a Plan for Life report predicting that direct insurance will account for up to 40% of new products bought in the next 10 years.
Why are more customers looking at life insurance directly?
Direct life insurance is relatively new to Australian consumers and although some companies do include options such as income protection and total and permanent disability insurance, many others don't. Despite this, direct life insurance is easier to obtain and simpler because no financial planner is involved, it has fewer medical restrictions, can be obtained online, or over the phone and the cover is immediate.
Could direct cover threaten traditional purchase channels?
Despite this growth, there is a strong belief that there will always be a place for advisers in the Australian insurance industry. While the convenience of direct cover may appeal to many, there is still a number of people who would prefer to purchase through an adviser. At the end of the day there is benefits in both avenues and it really comes down to the type of buyer looking to purchase the cover.
Increased competition across market
The increase in popularity of direct insurance products means an increase in competition in the Australian market, bringing a greater selection of products to consumers each offering the most competitive premium possible. Australians are fortunate to have such a diverse market of products to choose from.
Q. How long does it take to receive an online quote?
- A. In most cases your online quote will be returned within minutes. However, to go ahead with the application you may need to answer further health, lifestyle and occupation questions.
Q. What information is required to complete an online quote?
- A. You will need to enter your date of birth, gender, smoking status, occupation, policy type and the benefit amount you would like to receive from the policy.
Q. How long is it before the life insurance cover is active?
- A. Once you finalise payment online for your life insurance, your cover is active.
* The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking financial advice and consider your personal financial circumstances when comparing products.